Zero-coupon bond Yield (LO16-2) Assume a zero-coupon bond that sells for $423 and will mature in 10 years at $1,200. What is the effective yield to maturity? (Compute PVIF and go to Appendix B for the 10-year figure to find the answer, or compute FVIF and go to Appendix A for the 10-year figure to find the answer. Either approach will work.)
Using Appendix B when the yield to maturity is 11
| N | I/Y | PV | PMT | FV | ||||||||||
| 10 | 11 | x | 0 | 1,200 | ||||||||||
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