The market price is ​$1 comma 075 for a 9​-year bond ​($1 comma 000 par​ value) that pays 11 percent annual​ interest, but makes interest payments on a semiannual basis ​(5.5 percent​ semiannually).  What is the​ bond's yield to​ maturity?The​ bond's yield to maturity is

enter your response here​%. ​ (Round to two decimal​ places.)

To find the bond's **yield to maturity (YTM)**, we can use the following information:

- Par value ($ P $): $1,000
- Market price ($ PV $): $1,075
- Coupon rate: 11% annually, which is 5.5% semiannually
- Time to maturity: 9 years, or $ 18 $ semiannual periods
- Coupon payment ($ C $): $ 5.5\% \times 1,000 = 55 $ (paid semiannually)
  
The yield to maturity is found by solving the bond price formula:

\[
PV = C \times \left( 1 - (1 + r)^{-n} \right) / r + \frac{F}{(1 + r)^n}
\]

Where:
- $ PV $ = Present value (market price)
- $ C $ = Coupon payment
- $ r $ = Semiannual yield to maturity
- $ n $ = Number of periods
- $ F $ = Par value

The equation is complex to solve manually, so I will calculate it using an iterative method. Let's proceed to find the YTM.The bond's yield to maturity (YTM) is **9.73%**.

Would you like more details or have any further questions?

Here are some related questions to explore:
1. How does the coupon rate affect the bond's yield to maturity?
2. What happens to the YTM if the market price of the bond increases?
3. How does the number of periods impact the YTM calculation?
4. Can the YTM be higher than the coupon rate? Why or why not?
5. How does semiannual compounding affect bond prices and yields?

**Tip:** A bond's YTM represents the annual return an investor can expect if the bond is held to maturity and all coupon payments are reinvested at the same rate.

The market price is $1,075 for a 9-year bond ($1,000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield to maturity?

Find the yield to maturity (YTM) of a 9-year bond priced at $1,075 with a par value of $1,000 and an 11% annual interest rate, paid semiannually. This step-by-step guide covers bond price formulas and iterative methods for solving YTM. Suitable for college students or advanced high school learners in finance or mathematics.

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