##### Need math help to calculate this math question about George, Inc. bonds

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George, Inc. bonds have a face value of \$1,000 and a 9% coupon paid semiannually; the bonds mature in 8 days. What current yield would be reported in The Wall Street Journal if the yield to maturity is 7%.

Nov 18th, 2015

Thank you for the opportunity to help you with your question!

George, Inc. bonds have a face value of \$1,000 and a 9% coupon paid semiannually; the bonds mature in 8 days. What current yield would be reported in The Wall Street Journal if the yield to maturity is 7%.

Semiannual payments= 9%*1000/2 = 45

Price = 45/(1+7%/2) + 45/(1+7%/2)^2 + 45/(1+7%/2)^3 + 45/(1+7%/2)^4 �.. = 45/(1+7%/2)^16

Price =\$1,120.94

current yield = 9%*1000/ 1,120.94= 8.03%

Please let me know if you need any clarification. I'm always happy to answer your questions.
Nov 18th, 2015

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Nov 18th, 2015
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Nov 18th, 2015
Oct 20th, 2017
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