chandsingh

Current market price of bond is $1,013 (N=6, I/Y=5.5/2=2.75, PMT=$30, FV=$1000, CPT PV)
If coupons are reinvested at 4.5%, FV of coupons at end of three years is $191. (N=6, I/Y=4.5/2=2.25, PMT=$30, PV=0, CPT FV)
YTM for investment in this bond is 5.46% (PV=$1,013, N=6, PMT=0, FV=$1,191 (191+1000), CPT I/Y = 2.73 X2 = 5.46%)