Answer :
The bond's current yield is vi.7% ($1,200 annual interest / $18,000 x 100). But the bond's yield to maturity during this case is higher. It considers that you simply are able to do combining interest by reinvesting the $1,200 you receive annually.
It additionally considers that once the bond matures, you'll receive $20,000, that is $2,000 quite what you paid.
The shape of a yield curve will assist you in deciding whether or not to get a long or short bond. Investors typically expect to receive higher yields on long bonds.
As a result, they expect bigger compensation once they loan cash for extended periods of your time. Also, the longer the maturity, the bigger the impact of a modification in interest rates on the bond's worth.
To learn more about bond yield, visit here.
https://brainly.com/question/13781971
#SPJ4