Consider a 10-year $1000 bond that was issued 4-years ago. If the bond has an annual coupon rate of 6%, pays coupon semi-annually, and is currently selling for $1,027. Estimate if the yield to maturity is more likely to be 7.25%, 6.45% or 5.45%. Explain why.

Answer rating: 100% (QA)

To yield to maturity YTM of a bond is the internal rate of return IRR of the bond if it is held unti... View the full answer