Final answer:
The student's question pertains to calculating the yield to maturity of a bond. Without the coupon rate or actual payment details, it's not possible to compute the exact YTM. The yield to maturity reflects total returns, including interest payments and potential capital gains.
Step-by-step explanation:
The student is asking about calculating the yield to maturity (YTM) of a bond, which is a fundamental concept in finance and investment. The YTM is a measure of the annualized return on a bond if it is held until maturity. To find the YTM, one has to equate the present value of future cash flows (coupon payments and face value) to the current trading price of the bond and solve for the discount rate (YTM). This is typically done using a financial calculator or software as it requires numerical methods to solve for the interest rate in a present value equation. The expression for the YTM is not explicitly given in the provided information, so the correct yield to maturity cannot be calculated without additional details such as the coupon rate.
When the bond is trading at a discount (like in this case at $901), the YTM will be higher than the coupon rate. This reflects the additional return the investor earns as the bond's value rises to its face value at maturity. Because the question does not provide the coupon rate or the actual payments, I cannot provide the exact YTM percentage.