The yield to maturity of the bond, which pays $80 in annual coupon with a face value of $1,000 and currently sells for $1,200 with 20 years remaining until maturity is 6.22%.
What is yield to maturity?
The yield to maturity shows the percentage rate of return for a bond when the investor holds the asset until its maturity date.
The yield to maturity can be computed using an online finance calculator as follows:
Data and Calculations:
Face value = $1,000
Bond price = $1,200
Annual coupon rate = 8% ($80/$1,000 x 100)
Years to maturity = 20 year(s)
Result:
Yield to maturity (YTM) = 6.22%
Thus, the yield to maturity of the bond, which pays $80 in annual coupon with a face value of $1,000 and currently sells for $1,200 with 20 years remaining until maturity is 6.22%.
Learn more about calculating yield to maturity at https://brainly.com/question/17073732
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