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?