What Is the Yield to Maturity of a Bond with the Following

question 113

Multiple Choice

What is the yield to maturity of a bond with the following characteristics? Coupon rate is 8 percent with semi-annual payments; current price is $960, three years until maturity.

• A)4.78 percent
• B)5.48 percent
• C)9.57 percent
• D)12.17 percent Using the BAII Plus calculator:

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Definitions:

Daily Returns

The profit or loss of an investment over a single trading day, expressed as a percentage of the investment's value at the start of the trading day.

Normally Distributed

A statistical term that describes a bell-shaped frequency distribution that is symmetric about the mean, used in various financial models to assume the distribution of returns or asset prices.

Risk-Adjusted Returns

Performance measurement that evaluates the return gained from an investment relative to the risk taken, often calculated using measures such as the Sharpe ratio.

Small Firms

Companies with a relatively small market capitalization.