To calculate the bond's yield to maturity (YTM), we need to use the following bond-related information:

1. Current Price of Bond (P): $1,100
2. Par Value (FV): $1,000
3. Coupon Rate (annual): 8% (but it's paid semiannually, so the semiannual coupon rate is 4%)
4. Time to Maturity: 10 years (or 20 semiannual periods)
5. Semiannual Coupon Payment: $\frac{8\% \times 1,000}{2} = 40$ dollars per semiannual period.

The bond’s yield to maturity (YTM) is the rate ($r$) that makes the present value of all future cash flows (semiannual coupon payments and the par value at maturity) equal to the current bond price.

The bond price equation is:

$P = \sum_{t=1}^{20} \frac{C}{(1 + r)^{t}} + \frac{FV}{(1 + r)^{20}}$

where:

• $P = 1,100$ (current price),
• $C = 40$ (semiannual coupon payment),
• $FV = 1,000$ (face value),
• $r$ is the semiannual yield (which we will convert to annual yield later).

We will need to solve this equation for $r$ using a financial calculator or iterative approximation.

Let's calculate it.The bond's yield to maturity (YTM) is approximately 6.62% (rounded to two decimal places).

Would you like further details on the steps taken in this calculation, or do you have any additional questions?

Here are related questions that could expand on this topic:

1. How does the coupon rate affect the bond's yield to maturity?
2. What is the difference between yield to maturity and current yield?
3. How does a change in market price influence the yield to maturity?
4. What are the differences in yield calculations for annual versus semiannual coupon payments?
5. How can the bond’s duration affect its sensitivity to yield changes?

Tip: When calculating YTM for bonds with semiannual payments, remember to adjust the coupon payment, periods, and yield accordingly to ensure accurate results.