Ultimate access to all questions.
Explanation:
To find the yield to maturity (YTM) of the treasury note, we can use a financial calculator with the following inputs for an annual coupon bond:
$1,200 (Outflow to purchase the bond)$1,500 = $150$1,500Computing for I/Y (Yield to Maturity) gives approximately 17.34%. Option D is correct.
No comments yet.
Q.53 An investor wants to purchase a $1,500 par-value treasury note that has a 10% coupon rate and is expected to mature in 4 years. If the current price of the Treasury note is $1,200, calculate the yield to maturity of the note.
A
15.22%
B
16.38%
C
16.59%
D
17.34%