Info

Notice that we entered $30 as the payment because the bond actually makes payments of $30 every six months. Similarly, we entered 20 for N because there are actually 20 six-month periods. When we solve for the yield, we get 3.7 percent, but the tricky thing to remember is that this is the yield per six months, so we have to double it to get the right answer: 2 x 3.7 = 7.4 percent, which would be the bond's reported yield.

0 0

Post a comment