Chrome File Edit View History Bookmarks People Window Help Take a Test-Kyle Bell

Question

Chrome File Edit View History Bookmarks People Window Help Take a Test-Kyle Bellis current yield i Secure https://www.mathxl.com/Student/PlayerTest.aspx?testld-1886399 ure https: ECON 2411-010; Money& Banking Fall 18-Professor Svalestad The cur Quiz: Chapter 4 2.OapTime Remaining: 00:13:46 Submit Quiz Quiz All Im 50f 10 (5 complete) Rhis Quiz: 100 pt 1 -About 1,01C * Its'(and any sub This Question: 1..- What is the yield to maturity (YTM) on a simple loan for $2,000 that requires a repayment of $10,000 in five years' time? Chapter https://quizl coupon bond approximatio the bond is ow at $2,000,000 The yield to maturity is %. (Round your response to one decima,place.) People als When a bon bond? What is a ba How is a bor How do you Enter your answer in the answer box. Econ 640 Stuc https://quizlet.con

Explanation / Answer

The yield to maturity of this security with F= $10000, P = $2000, and n=5 is found by rearranging the DPV fThe yield to maturity is

i = (F/P)^(1/n) - 1

=(10000/2000)^(1/5)-1 = 1.37973 - 1 = 0.37973 or 37.973% or 38.0%

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