109k views
4 votes
A bond issued by a corporation on June 15, 2007, is scheduled to mature on June 15, 2017. If today is December 16, 2008, what is this bond's time to maturity? (Assume annual interest payments.)

1 Answer

2 votes

Answer:

8 years and 6 months

Step-by-step explanation:

Data provided in the question:

Bond issue date = June 15, 2007

Maturity date of bonds = June 15, 2017

Now,

Total time period of maturity i.e from June 15, 2007 to June 15, 2017

= 10 years

Thus,

The bond will mature in 10 years

also,

according to the question,

if today is December 16, 2008 i.e 1 year and 6 months have passed

Therefore,

The bond's time to maturity will be = 10 years - ( 1 years and 6 months )

= 8 years and 6 months

User Sumit Saxena
by
8.8k points