Bond Yield to Maturity (YTM)

B

N = 28, PMT = 120, PV = -1150, FV = 1000, CPT I/Y.

To calculate the bond's yield to maturity (YTM), we need to consider several factors, including the bond's price, coupon payments, time to maturity, and the face value of the bond. Unfortunately, you haven't provided the necessary information for the calculation, such as the bond's price, coupon rate, and time to maturity.

The yield to maturity (YTM) represents the total return an investor can expect to earn from a bond if they hold it until maturity. It takes into account the bond's price, coupon payments, and the time value of money.

To calculate the YTM, you need to use a financial calculator or a spreadsheet software that supports the YIELD function. However, I can give you a general understanding of how YTM is calculated.

The YTM is the discount rate that equates the present value of the bond's cash flows (coupon payments and the face value) to its current market price. In other words, it is the interest rate that makes the present value of all the bond's future cash flows equal to its current price.

Here are the general steps to calculate YTM:

1. Obtain the bond's current market price.
2. Determine the bond's future cash flows, including the periodic coupon payments and the face value to be received at maturity.
3. Estimate the time to maturity for the bond.
4. Use a financial calculator or a spreadsheet function like YIELD to find the YTM.

The YTM is expressed as an annual percentage rate (APR), and it represents the average annual return an investor would earn if they reinvested all coupon payments at the YTM rate until the bond's maturity.

Without specific information about the bond's price, coupon rate, and time to maturity, it is not possible to calculate the exact YTM and determine the correct answer from the given options (A, B, C, or D).