Computation of yield to maturity when interest is paid

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Reference no: EM1310729

Computation of yield to maturity when interest is paid and compounded annually and bond's rate of return earned

1. Southern Bell has issued percent bonds that mature on August 1, 2011. Assume that interest is paid and compounded annually. Determine the yield to maturity if an investor purchases a $1,000 denomination bond for $853.75 on August 1, 2004.

2. If you purchase a zero coupon bond today for $225 and it matures at $1,000 in 11 years, what rate of return will you earn on that bond (to the nearest 10th of 1 percent)?

Reference no: EM1310729

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