FFN20303: A bond matures in 12 years and pay 8 percent coupon annually. The bond has face value of RM1000: Money And Capital Market Assignment, MSU, Malaysia
University | Management & Science University (MSU) |
Subject | FFN20303 Money and Capital Market Assignment |
- A bond matures in 12 years and pay 8 percent coupon annually. The bond has face value of RM1000 and currently sells for RM985. What is the bond’s current yield and yield to maturity?
-
- Current yield.
Coupon Payment = CR% x Par value
Current Yield (%) = Coupon Payment
Value or Price of Bond
Yield to maturity. (answer:8.19%)
YTM = CP + (PV – Vb)/n
(PV + Vb)/2
2.Kufman Enterprise has bonds outstanding with a RM1,000 face value and 10 years left until maturity. The bonds have an 11 percent annual coupon payment. The current price of these bonds is RM1,175. Calculate:
- Current Yield (CY).
- Yield To Maturity (YTM).
3. A bond that matures in 10 years sells for RM985. The bond has a face value of RM1,000 and a 7 percent annual coupon. Calculate;
Current Yield (CY).
Yield To Maturity (YTM).
4. A 10-year, 12 percent semi-annually coupon bond, with a par value of RM1,000 sells for RM1,100. Calculate;
- Current Yield (CY).
- Yield To Maturity (YTM).
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