Essentials Of Investments
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ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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![**Treasury Notes and Bonds**
Use the information in the following table: [Table Icon].
1. What is the yield to maturity of the February 1996 Treasury bond based on the price in the table? Assume that the bond has a $100,000 par value and makes semiannual coupon payments.
2. What is the current yield of the bond?
3. Why is the current yield higher than the yield to maturity?
**Question**: What is the yield to maturity of the February 1996 Treasury bond?
\[ \text{Input Box for Answer} \% \] (Round to three decimal places.)
---
**Explanation of any diagrams or graphs**:
*There are no diagrams or graphs in the image to describe.*](https://content.bartleby.com/qna-images/question/d8c403c1-73da-4878-97dd-7583351688c0/b9c772fb-f232-4739-94a0-6f76e28148f1/tvgb4l_processed.png)
Transcribed Image Text:**Treasury Notes and Bonds**
Use the information in the following table: [Table Icon].
1. What is the yield to maturity of the February 1996 Treasury bond based on the price in the table? Assume that the bond has a $100,000 par value and makes semiannual coupon payments.
2. What is the current yield of the bond?
3. Why is the current yield higher than the yield to maturity?
**Question**: What is the yield to maturity of the February 1996 Treasury bond?
\[ \text{Input Box for Answer} \% \] (Round to three decimal places.)
---
**Explanation of any diagrams or graphs**:
*There are no diagrams or graphs in the image to describe.*
Transcribed Image Text:**Bond Information as of February 15, 2008**
| Type | Issue Date | Price (per $100 par value) | Coupon Rate | Maturity Date | YTM | Current Yield | Rating |
|------|------------|----------------------------|-------------|---------------|-----|--------------|--------|
| Bond | Feb 1996 | 122.97 | 9.75% | 2-15-2016 | — | — | AAA |
- **Type:** This is a bond.
- **Issue Date:** The bond was issued in February 1996.
- **Price:** The current price of the bond is $122.97 per $100 of par value.
- **Coupon Rate:** The bond offers a coupon rate of 9.75%, meaning this is the annual interest rate paid to the bondholder.
- **Maturity Date:** This bond will mature on February 15, 2016.
- **YTM (Yield to Maturity):** This value is not provided.
- **Current Yield:** This value is not provided.
- **Rating:** The bond has a AAA rating, which indicates a very high level of creditworthiness.
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