Consider a portfolio of bonds with the following characteristics: Bond A Term: 5 years Coupon rate: 3%; coupons are paid twice a year (i.e. semi-annual compounding).
Face value: $1,000 The current market price is $910. Bond B Term: 5 years Coupon rate: 9%; coupons are paid twice a year (i.e. semi-annual compounding).
Face value: $1,000 The current market price is $1100. A portfolio of bonds investing 40% in bond A and 60% in bond B. Assume arbitrage-free conditions. What is the bond portfolio's YTM? Please express your answer in decimal form, keep 4 decimal places. E.g. if your answer is 4.38656%, write down 0.0439.