Question: Starling is evaluating Bond prices and have requested your help. Below information is provided. C = Coupon = 10%, interest rate = ytm = r

  1. Starling is evaluating Bond prices and have requested your help. Below information

    is provided. C = Coupon = 10%, interest rate = ytm = r = 12%, Maturity = N or T = 10 years, P =

    price, Par = $1,000

  2. ( i) What is Yield to Maturity (YTM)? (1 Mark)

  3. (ii) Assume that the price of the bond is $940, with the face value of the bond $1000. The annual coupon rate is 8%, with a maturity of 12 years. Based on this information, you are required to calculate the approximate yield to maturity.

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