What Is the Yield to Maturity of a Ten-Year,$1000 Bond

question 28

Multiple Choice

What is the yield to maturity of a ten-year,$1000 bond with a 5.2% coupon rate and semiannual coupons if this bond is currently trading for a price of $884?

• A)5.02%
• B)6.23%
• C)6.82%
• D)12.46%

---

Definitions:

Portfolio Beta

A measure of the overall market risk or volatility of an investment portfolio relative to the market as a whole.

Common Stocks

Equity securities representing ownership shares in a corporation, giving holders voting rights and a claim on profits.

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, typically represented by the yield on government securities.

Required Return

Required return is the minimum expected return by investors for investing in a stock, bond, or another security, considering its risk.