The 7 percent semiannual coupon bonds of Over The Counter, Inc., are selling for $1,102.25. The bonds have a face value of $1,000 and mature in 18 years. What is the yield to maturity

YTM = 2.84%

Explanation:

We know,

YTM =

Here,

I = Coupon payment = It is calculated by multiplying the coupon interest rate by the par value of the bond.

M = Bond's par value.

Vo = Bond's current market price.

n = Number of years or periods.

Given,

n = 18

I = Semiannual coupon bonds rate = $1,000*7%*(1/2) = $70 ÷ 2 = $35

M = Par value of a bond = $1,000

Vo = Market value of the bond = $1,102.50

Therefore,

YTM =

or, YTM =

or, YTM = $29.32 ÷ $1,034.08

or, YTM = 0.0284

Therefore, YTM = 2.84%

answer; ///hong kong;

answerboth the short run phillips curve and the aggregate demand and aggregate supply model