Question: Chapter 12 Financial Planning Exercise 13 Calculating and interpreting current yield and yield to maturity Find the current yield of a 5.65 percent, 8-year bond

Chapter 12 Financial Planning Exercise 13 Calculating and interpreting current yield and yield to maturity

Find the current yield of a 5.65 percent, 8-year bond that's currently priced in the market at $853.75. Now, use a financial calculator to find the yield to maturity on this bond (use annual compounding). What's the current yield and yield to maturity on this bond if it trades at $1,000? If it's priced at $750? The par value of the bond is $1,000. Round your answers to two decimal places. Do not round intermediate calculations.

Quote	Current Yield	Yield to Maturity
5.65%, 8 yr., $853.75	%	%
5.65%, 8 yr., $1,000	%	%
5.65%, 8 yr., $750	%	%

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