Posted by
**Mel** on
.

Current yield and yield to maturity

A bond has a $1,000 par value, 10 years to maturity,

a 7 percent annual coupon, and sells for $985.

a. What is its current yield?

b. What is its yield to maturity (YTM)?

c. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today?