The market price is $850 for a 12-year bond ($1,000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield to maturity?

The market price is $850 for a 12-year bond ($1,000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield to maturity?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 6FPE

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Question

Related to Checkpoint 9.2) (Yield to maturity) The market price is

$850

for a

12-year

bond

($1,000

par value) that pays

percent annual interest, but makes interest payments on a semiannual basis

(5.5

percent semiannually). What is the bond's yield to maturity?

Question content area bottom

Part 1

The bond's yield to maturity is

enter your response here%.

(Round to two decimal places.)

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