Find out what is the nominal yield to maturity first

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Reference no: EM13814608

A bond with a face value of $1,000 matures in 9 years and has a 7% semi annual coupon. The bond currently sells for $846.

You would pay $846 for each bond if you think that a “fair” market interest rate (discount rate) for such bonds is ____. (Hint: find out what is the nominal yield to maturity first) (Please Show work and calculation which led to the solution of the problem)

a) 10.24%

b) 12.53%

c) 11.28%

d) 8.67%

e) 15.60%

Reference no: EM13814608

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