Solutions to Chapter 1

Using a financial calculator, compute the yield to maturity by entering: n = 10; PV = (()1100; FV = 1000; PMT = 80, compute i = 6.602%. Verify the solution as follows: (difference due to rounding) 7. When the bond is selling at face value, its yield to maturity equals its coupon rate. This firm’s bonds are selling at a yield to maturity of 9.25%. ................
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