![brianabrady06](/avatars/35121.jpg)
brianabrady06
28.10.2020 •
Business
You bought a STRIP at 96 dollars with maturity of 3 years. Calculate the yield to maturity of this STRIP % (keep two decimal points)
Solved
Show answers
More tips
- S Style and Beauty Learn how to tie a keffiyeh on your head like a pro...
- S Style and Beauty How to braid friendship bracelets?...
- F Food and Cooking Delight for Gourmets: How to Prepare Liver Pate...
- C Computers and Internet How to Learn to Type Fast?...
- H Health and Medicine Angina: Causes, Symptoms, and Treatment...
- D Dating, Love, Relationships How to Overcome Jealousy: Tips and Tricks...
- H Health and Medicine 10 Ways to Cleanse Your Colon and Improve Your Health...
- W Work and Career How to Start Your Own Business: Tips and Recommendations...
- F Food and Cooking How to Make Delicious Cabbage Pies: The Best Recipes!...
- F Food and Cooking Discover Delicious Recipes You Can Make with Ground Meat...
Answers on questions: Business
- B Business An inexperienced bookkeeper prepared the following trial balance that does not balance. Prepare a correct trial balance, assuming all account balances are normal....
- H History A commanded a group of 80 legionaries...
- M Mathematics The rent charged for offices in a building is proportional to the area of the office. the monthly rent for one office with an area of 1,800 square feet is $1,200....
- C Chemistry A sample of the compound MSO4 weighing 0.1131 g reacts with barium chloride and yields 0.2193 g BaSO4. What must be the atomic mass of the metal M. (hint all the SO4-2...
Ответ:
0.0136
Explanation:
The following information can be gotten from the question:
Current price = $96
Par Value = $100
Time to Maturity = 3 years
Semiannual Period = 3 × 2 = 6
The yield to maturity of this STRIP will be calculated as:
Let the semiannually yield to maturity be represented by y.
96 = 100/(1 + y)^6
Cross multiply
96(1+y)^6 = 100
Divide both side by 96
(1+y)^6 = 100/96
(1+y)^6 = 1.0417
1 + y^6 = 1.0417
y^6 = 1.0417 - 1
y^6 = 0.0417
y = 0.0068
Therefore, the semiannual YTM = 0.0068
Annual YTM will now be:
= 2 × Semiannual YTM
= 2 × 0.068
Annual YTM = 0.0136
Ответ: