A bond has 15 years to maturity and an annual coupon of 12%. The face value...

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A bond has 15 years to maturity and an annual coupon of 12%. Theface value of the bond is $1,000 and coupon payments are madesemiannually. The bond is currently trading in the market at $880.What can you say about the YTM on this bond?
Answer provided: The YTM is greater than 12%
Why, what is the formula or rule behind this answer?

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A bond has 15 years to maturity and an annual coupon of 12%. Theface value of the bond is $1,000 and coupon payments are madesemiannually. The bond is currently trading in the market at $880.What can you say about the YTM on this bond?Answer provided: The YTM is greater than 12%Why, what is the formula or rule behind this answer?

A bond has 15 years to maturity and an annual coupon of 12%. The face value...

90.2K

Verified Solution

Question

Finance

Answer & Explanation Solved by verified expert

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