- Yield to maturity -

The bond shown in the following table pays interest annually.

Par value

$100

Coupon interest rate

11%

Years to maturity

9

Current value

$80

a. Calculate the yield to maturity (YTM) for the bond.

b. What relationship exists between the coupon interest rate and yield to maturity and

the par value and market value of a bond? Explain.

a. The yield to maturity (YTM) for the bond is %. (Round to two decimal places.)

b. What relationship exists between the coupon interest rate and yield to maturity and

the par value and market value of a bond? Explain. (Select the best answer below.)

O A. The market value of the bond approaches its par value as the time to

maturity declines. The yield-to-maturity approaches the coupon interest rate

as the time to maturity declines.

O B. The market value of the bond approaches its par value as the time to

maturity increases. The yield-to-maturity approaches the coupon interest

rate as the time to maturity declines.

O C. The market value of the bond approaches its par value as the time to

maturity declines. The yield-to-maturity approaches the coupon interest rate

as the time to maturity increases.

0 D.

The market value of the bond approaches its par value as the time to

maturity increases. The yield-to-maturity approaches the coupon interest

rate as the time to maturity increases

A.

B.

C.

D.

step by step please

Yield to maturity The bond shown in the following table pays interest annually. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Par value $100 Coupon interest rate 11% Years to maturity 9 Current value $80 a. Calculate the yield to maturity (YTM) for the bond. b. What relationship exists between the coupon interest rate and yield to maturity and the par value and market value of a bond? Explain. a. The yield to maturity (YTM) for the bond is %. (Round to two decimal places.) b. What relationship exists between the coupon interest rate and yield to maturity and the par value and market value of a bond? Explain. (Select the best answer below.) O A. The market value of the bond approaches its par value as the time to maturity declines. The yield-to- maturity approaches the coupon interest rate as the time to maturity declines. OB. The market value of the bond approaches its par value as the time to maturity increases. The yield-to-maturity approaches the coupon interest rate as the time to maturity declines. OC. The market value of the bond approaches its par value as the time to maturity declines. The yield-to-maturity approaches the coupon interest rate as the time to maturity increases. OD. The market value of the bond approaches its par value as the time to maturity increases. The yield-to-maturity approaches the coupon interest rate as the time to maturity increases