Answer:
Yield to maturity 10.87%
Explanation:
Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.
Face value = F = $1,000
Coupon payment = $1,000 x 10% = $100
Selling price = P = $928
Number of payment = n = 15 year
The coupon rate can be calculated using following formula
Yield to maturity = [ $100 + ( $1,000 - $928 ) / 15 ] / [ ( $1,000 + $928 ) / 2 ]
Yield to maturity = $104.8 / $964
Yield to maturity = 0.1087 = 10.87%
