The following table shows some data for three bonds. In each case, the bond has a coupon of zero. The face value of each bond is $1,000. Bond Price Maturity (Years) Yield to Maturity A $ 300 30 — B 300 — 8% C — 10 10 What is the yield to maturity of bond A? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places. Assume annual compounding. What is the maturity of B? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Assume annual compounding. What is the price of C? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Assume annual compounding.
The following table shows some data for three bonds. In each case, the bond has a coupon of zero. The face value of each bond is $1,000.
| Price | Maturity (Years) | Yield to Maturity | |
|---|---|---|---|
| A | $ 300 | 30 | — |
| B | 300 | — | 8% |
| C | — | 10 | 10 |
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What is the yield to maturity of bond A?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places. Assume annual compounding.
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What is the maturity of B?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Assume annual compounding.
-
What is the price of C?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Assume annual compounding.
Step 1
The yield on a bond is the discount rate that can be applied to bring the bond's price and the present value of all of its cash flows into balance. In other words, the present value of all the cash flows is added to determine the price of a bond.
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