1 answer

Myriam is considering purchasing a 20-year bond that is selling for $983. The bond can be called in 4 years

Question:

Myriam is considering purchasing a 20-year bond that is selling for $983. The bond can be called in 4 years at 103. What is t

Myriam is considering purchasing a 20-year bond that is selling for $983. The bond can be called in 4 years at 103. What is the YTC for this bond if it has a 4% coupon, paid semiannually? a. 5.18%. b. 5.16%. C. 4.99% d. 4.13%.

Answers

YTC is calculated using the RATE function as follows:-

=RATE(nper,pmt,pv,fv)

=RATE(4*2,4%/2*1000,-983,103%*1000)*2

=5.16%

.

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