What is yield to maturity and effective rate of return

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Reference no: EM132017830

Electrolex, Inc., has four-year bonds outstanding that pay a coupon rate of 6.5 percent and make coupon payments semiannually. If these bonds are currently selling at $912.89.

a. What is the yield to maturity that an investor can expect to earn on these bonds?

Yield to Maturity in %

Adrienne Dawson is planning to buy 10-year zero coupon bonds issued by the U.S. Treasury. If these bonds have a face value of $1,000 and are currently selling at $414.25, what is the expected return on them? Assume that interest compounds semiannually on similar coupon paying bonds.

Effective Rate of Return in %

Reference no: EM132017830

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