Cornerstone Industries has a bond outstanding that has a 5% coupon rate, $1,000 face value, and a market price of $897.34. If the bond matures in 5 years and interest is paid on a semi-annual basis, what is the yield to maturity on the bond? % format to 2 decimal places

A bond is a sort of instrument in which the issuer owes the bearer a debt and is required, depending on the terms, to repay the bond's principal and interest over a predetermined period of time at the bond's maturity date. Interest is often paid at regular intervals.

Bonds can be identified by their maturity, coupon rate, tax status, and callability, among other attributes. Bonds are subject to a number of hazards, including interest rate risk, credit/default risk, and prepayment risk.

In international trade, the phrase "Carriage Paid To" (CPT) denotes that the seller delivers the products at their expense to a carrier or another person whom the seller designates. As long as the products are not in the designated party's care, the seller is responsible for all risks, including loss.

FV(future value)= 1000

PV(present value)= -897.34

PMT(a payment)= .05(1000)/2= 25

= 5N(2)= 10

I/Y=?

CPT I/Y= 3.75(2)= 7.5

Therefore,7.5% is the yield to maturity on the bond.

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