Answer:
YTM = 0.6940%
Explanation:
THe Yield to Maturity (YTM) is the return that you expect from the bond if you held the bond till maturity.
The formula would go as:
YTM = [tex]\frac{F}{P}^{\frac{1}{n}} -1[/tex]
Where
F is the face value, or par value
P is the current price
n is the time period, maturity period
Given,
F = 1000
P = 920
n = 12, we have:
YTM = [tex]\frac{F}{P}^{\frac{1}{n}} -1 = \frac{1000}{920}^{\frac{1}{12}} -1=0.006972[/tex]
Thus, the yield to maturity would be:
YTM = 0.6940%
