Question
Consider a 12%, 15 year bond that pays interest semiannually, and its current price is $675. What is the promised yield to maturity? I can
Consider a 12%, 15 year bond that pays interest semiannually, and its current price is $675. What is the promised yield to maturity?
I can see the answer on the document, I just don't understand where the 60 is coming from.
675 = 60( 1 - [(1/1+i)^30] / i) + 1000 / (1 + i)^30
i = 0.09227
Annualized = 0.092227x 2 = 0.1845
I just don't understand the "60"
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Okay lets break this down stepbystep The key information given Coupon rate 12 per year Maturity 15 y...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Document Format ( 2 attachments)
664240047716a_984049.pdf
180 KBs PDF File
664240047716a_984049.docx
120 KBs Word File
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
