You have paid $950 for a 7% coupon bond with a face value of $1,000 that matures in five years.
The coupon is paid annually. You plan on holding the bond for one year. 1) What is today’s bond
yield? 2) If you want to earn a 9% rate of return on this investment, what yield should the bond
have in one year?
The correct answer is 1) 8.26%, 2) 8.04%. Can you show me how to get their while using a financial calculator?