Current yield Yield to maturity the bond over the 10-year holding period. 6. What is the current yield of an 8 percent coupon rate bond priced at $877.60? 7. What is the yield to maturity for the data in problem 6? Assume there are 10 years left to maturity. It is a $1,000 par value bond. Use the trial-and-error approach with annual analysis. (Hint: Because the bond is trading for less than par value, you can assume the interest rate (1) for which you are solving is greater than the coupon rate of 8 percent.] 8. What is the yield to maturity for a 10 percent coupon rate bond priced at $1,090.902 Assume there are 20 years left to maturity. It is a $1,000 par value bond. Use the trial-and-error approach with annual analysis. (Hint: Because the bond is trading at a price above par value, first decide whether your initial calculation should be at an interest rate above or below the coupon rate.) 9. What is the current yield in problem 8? Why is it slightly higher than the yield to maturity? Yield to maturity Comparison of yields