Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.

QUESTION

How do you calculate intrinsic value aka expected price aka PV?PROBLEM:FYI bonds have a

How do you calculate intrinsic value aka expected price aka PV?

PROBLEM:

FYI bonds have a

par value of $1,000. The bonds pay an 8% annual coupon and will mature in 11 years. i) Calculate the price if the yield to maturity on the bonds is 7%, 8% and 9%, respectively. ii) What is the current yield on these bonds if the YTM on the bonds is 7%, 8% and 9%, respectively.

I understand how to calculate the current yield (PMT/PV) if the PV is given, but how do you calculate it when it is not given, like in this problem?

Show more
LEARN MORE EFFECTIVELY AND GET BETTER GRADES!
Ask a Question