Question
Mathematics Question on Shares and Dividends
A bond of face value ₹1000 matures in 10 years and interest is paid annually at 4% per annum. If the present value of the bond is ₹838, find the yield to maturity (1.04)-10 ≈ 0.676.
A
1.6% p.a.
B
2.0% p.a.
C
2.6% p.a.
D
3.2% p.a.
Answer
2.0% p.a.
Explanation
Solution
The correct option is (B) :2.0% p.a..