You bought a newly issued 10-year, $1,000 par value, 5.50% coupon bond (with semiannual coupon payments) on May 1, 2018. You decided to check the value and yields on the bond annually, so that you can keep track of your wealth. Your first check was to be done on May 1, 2019. On April 15, 2019, the yield to maturity for the bond changed to 5.20%. For your two year anniversary of owning the bond (May 1, 2020), calculate the bond's current yield using the new yield to maturity. Report the percentage to two decimal places 0.02348 = 2.35 ) .

You bought a newly issued 10-year, $1,000 par value, 5.50% coupon bond (with semiannual coupon payments) on May 1, 2018. You decided to check the value and yields on the bond annually, so that you can keep track of your wealth. Your first check was to be done on May 1, 2019. On April 15, 2019, the yield to maturity for the bond changed to 5.20%. For your two year anniversary of owning the bond (May 1, 2020), calculate the bond's current yield using the new yield to maturity. Report the percentage to two decimal places 0.02348 = 2.35 ) .

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 13P

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You bought a newly issued 10-year, $1,000 par value, 5.50% coupon bond (with semiannual coupon payments) on May 1, 2018. You decided to check the value and yields on the bond annually, so that you can keep track of your wealth. Your first check was to be done on May 1, 2019. On April 15, 2019, the yield to maturity for the bond changed to 5.20%. For your two year anniversary of owning the bond (May 1, 2020), calculate the bond's current yield, the market price of the bond, and the capital gains yeild using the new yield to maturity. Report the percentage to two decimal places
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