Financial Risk Manager Part 1

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Explanation:

The correct answer is B. 6.41%

Calculation: Using the financial calculator inputs:

N = 8 (number of periods)
PV = -975 (present value/price)
PMT = 60 (coupon payment)
FV = 1000 (face value)
CPT I/Y = 6.40913%

This represents the yield to maturity that equates the present value of future cash flows (coupons and principal) to the current bond price of $975.

Explanation:

The correct answer is B. 6.41%

Calculation: Using the financial calculator inputs:

N = 8 (number of periods)
PV = -975 (present value/price)
PMT = 60 (coupon payment)
FV = 1000 (face value)
CPT I/Y = 6.40913%

This represents the yield to maturity that equates the present value of future cash flows (coupons and principal) to the current bond price of $975.

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Ultimate access to all questions.

Calculate the yield to maturity for a bond with the following characteristics:

N = 8

PV = -975

PMT = 60

FV = 1000

Exam-Like

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A

5.5%

0.0%

B

6.41%

100.0%

C

6.0%

D

6.25%

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Financial Risk Manager Part 1

Get started today

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Get started today

Calculate the yield to maturity for a bond with the following characteristics: N = 8 PV = -975 PMT = 60 FV = 1000

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Calculate the yield to maturity for a bond with the following characteristics:

N = 8

PV = -975

PMT = 60

FV = 1000