HOW DO YOU CALCULATE THE ANNUAL PRICE CHANGE FOR THE APPROXIMATE - ProProfs Discuss
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How do you calculate the annual price change for the approximate yield to maturity?



Asked by Adalyn, Last updated: Oct 05, 2021

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John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

Approximate yield to maturity?if the current price of the bond is 107 and it matures at 100, that means the investor paid 107 but will only get back 100. so you can see this as a loss of $7.next, determine how much of a loss that is per year. if the bond matures in 2 years, for example, the loss per year must be $7/2 = $3.5.so in the equation, the annual price change would be -$3.5.if the current price of the bond were 96 and it matures at 100, that means the investor paid $96 and will get back more than they paid for. so you can see this as a gain of $4.next, determine how much of a gain that is per year. if the bond matures in 4 years, the gain per year must be $4/4 = $1.so in the equation, the annual price change would be +$1.
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