so, I'm at a loss...
Q. The yield to maturity equals 10% on a 10yr 8% semiannual coupon bond. Question is what would I pay for this bond.
So, I think I know that YTM = 10%, k[sub:3h368mjb]d[/sub:3h368mjb]=8%, N=10, M=undefined par value, INT = 8%[*]M and V[sub:3h368mjb]b[/sub:3h368mjb]=INT/2(PVIFA[sub:3h368mjb]kd/2,2N[/sub:3h368mjb])+M(PVIF[sub:3h368mjb]kd/2,2N[/sub:3h368mjb]), but I'm clearly on the wrong path and not sure how to back into current yield and capital gains yield over the first year from here.
Any pointers??? THANKS!!
Q. The yield to maturity equals 10% on a 10yr 8% semiannual coupon bond. Question is what would I pay for this bond.
So, I think I know that YTM = 10%, k[sub:3h368mjb]d[/sub:3h368mjb]=8%, N=10, M=undefined par value, INT = 8%[*]M and V[sub:3h368mjb]b[/sub:3h368mjb]=INT/2(PVIFA[sub:3h368mjb]kd/2,2N[/sub:3h368mjb])+M(PVIF[sub:3h368mjb]kd/2,2N[/sub:3h368mjb]), but I'm clearly on the wrong path and not sure how to back into current yield and capital gains yield over the first year from here.
Any pointers??? THANKS!!