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Bond Pricing. A 6 year circular file bond pays interest of $80 annually, and sells for $950. What are its coupon rate, Current yield, and yield maturity?

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What is the current hysa interest rate for savings accounts?

The current HYSA interest rate for savings accounts is around 0.5 to 1.0 annually.


What is the current interest rate for a 12 month high yield CD?

The current interest rate for a 12-month high yield CD is around 1.5 to 2.5 annually.


What is gross redemption yield?

For GRY you need: Years to maturity Par Value Current Value (market Price) Running Yield The formula is: ((( Par + (Interest x years left to maturity)) - Market Price) / Years left to maturity) / Market Price


Is current Market Rate of Interest the same as yield to maturity?

It depends. YTM is calculated in the same way as IRR. You take all future cash flows and discout it by x% and equate to current market price. Then you solve for x% and what you get will be YTM. So if current price of bond is calculated by current market rate of interest than YTM=Current Market Rate of Interest. How ever bond price not always is equal to that price. Very often current yield(coupon/current market price) is different from current rate of interest. In such case YTM will differ from Current Market Rate of Interest.


Why is the yield to maturity (YTM) of a discount bond greater than the bond's current yield?

The yield to maturity (YTM) of a discount bond is greater than the bond's current yield because the YTM takes into account the total return an investor would receive if they hold the bond until maturity, including the capital gain from buying the bond at a discount. The current yield only considers the annual interest payments relative to the bond's current price, without factoring in the potential gain from the bond reaching its full face value at maturity.

Related Questions

What is the current hysa interest rate for savings accounts?

The current HYSA interest rate for savings accounts is around 0.5 to 1.0 annually.


What is the current interest rate for a 12 month high yield CD?

The current interest rate for a 12-month high yield CD is around 1.5 to 2.5 annually.


How do you calculate the value of a bond?

The value of a bond is calculated by adding up the present value of its future cash flows, which include periodic interest payments and the bond's face value at maturity. This calculation takes into account factors such as the bond's interest rate, time to maturity, and the current market interest rates.


What is gross redemption yield?

For GRY you need: Years to maturity Par Value Current Value (market Price) Running Yield The formula is: ((( Par + (Interest x years left to maturity)) - Market Price) / Years left to maturity) / Market Price


Is current Market Rate of Interest the same as yield to maturity?

It depends. YTM is calculated in the same way as IRR. You take all future cash flows and discout it by x% and equate to current market price. Then you solve for x% and what you get will be YTM. So if current price of bond is calculated by current market rate of interest than YTM=Current Market Rate of Interest. How ever bond price not always is equal to that price. Very often current yield(coupon/current market price) is different from current rate of interest. In such case YTM will differ from Current Market Rate of Interest.


Why is the yield to maturity (YTM) of a discount bond greater than the bond's current yield?

The yield to maturity (YTM) of a discount bond is greater than the bond's current yield because the YTM takes into account the total return an investor would receive if they hold the bond until maturity, including the capital gain from buying the bond at a discount. The current yield only considers the annual interest payments relative to the bond's current price, without factoring in the potential gain from the bond reaching its full face value at maturity.


Compute the current price of the bonds if the present yield to maturity is?

Compute the current price of the bond if percent yield to maturity is 7%


When heat is transferred to circular current it is called what?

When heat is transferred to a circular current, it is called induced current or eddy current. This phenomenon occurs due to Faraday's law of electromagnetic induction when a changing magnetic field induces an electric current in a conductor like a circular loop.


What is the current rate of student loan interest in the UK?

The student loan interest rate in the UK varies annually. Currently it is 2.75%. If a student who borrows from the Student Loan Company does not pay it back within thirty years then the debt is wiped.


Distinguish between current yield an yield to maturity of a fixed income security how are these yields calculated?

Current yield is equal to the annual interest payment divided by the market price. It is the actual yield an investor will receive (instead of what is stated). For example, if a bond has a stated rate of 5 percent, but is selling below par, the investor would receive more than a 5 percent return. If the bond is selling above par, the current yield is actually less than 5 percent. Yield to maturity is the total return an investor will receive if the security is held until the maturity date, which is all of the annual interest payments and the difference between the original price and the principal you will receive at maturity. This formula is much more complicated but there are websites that will do it for you. Try moneychimp.com which has a calculator for the current yield and YTM.


What are the different types of yields on bonds?

The different types of yields on bonds include current yield, yield to maturity, yield to call, and yield to worst. Current yield is the annual interest payment divided by the bond's current price. Yield to maturity is the total return anticipated on a bond if held until it matures. Yield to call is the yield calculation if a bond is called by the issuer before it matures. Yield to worst is the lowest potential yield that can be received on the bond.


How can I calculate the duration of bond with interest income tax?

Coupon Rate:10.50% Yearly Coupon Payment(times):12 Term to Maturity(years):3 Tax rate for interest income:10% Current total value of the bond:65025 What should I do now ? Should ı use compound interest ?