What is the yield to maturity

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Q1. What is the yield to maturity (YTM) of a semi-annual coupon bond that has a $1,000 face value, a 6% coupon, 10 years remaining to maturity and is selling for $110 (per $100 of face)?

Q2. Consider a bond with uncertain payoffs (non-zero default risk). It is a zero coupon bond (assume annual compounding), a $1,000 face value, and one year to maturity. There is a 80% chance the bond will repay in in full and a 20% change that the bond will default, in which case the investor expects to receive $900. The discount rate is 5%, compounded annually. What is the value of this bond and what is it's YTM?

Reference no: EM132938997

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