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Deciphering Bond Investments: The Essentials of Yield to Maturity
Chapter 4, Problem 17(choose chapter or problem)
What is the yield to maturity on a $10,000-face-value discount bond, maturing in one year, which sells for $9,523.81?
Questions & Answers
QUESTION:
What is the yield to maturity on a $10,000-face-value discount bond, maturing in one year, which sells for $9,523.81?
ANSWER:Step 1 of 3
Given data:
The yield to maturity on a $10,000-face-value discount bond, maturing in one year, which sells for $9,523.81, must be determined.
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Deciphering Bond Investments: The Essentials of Yield to Maturity
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Explore the concept of Yield to Maturity (YTM) and its significance in bond investments. Using a practical example, we uncover the process of calculating YTM and its implications for potential annual returns. This video is vital for investors seeking clarity on bond returns.