My cousin’s just asked me how to solve a question on YTM of a bond and she has been given the following info:
Coupon - 10% (paid semi-annually)
Issue Date - 01.10.2014
Maturity Date - 30.09.2022
Outstanding Amount - Rs. 104,208,410,000
Face Value - Rs. 100/bond
The question wants us to assume that the bond is purchased on 01.10.2019
Is there actually a way of solving this problem? To me, it seems that, ideally, with the given information, we would also require the market price of the bond to arrive at the YTM. However, since the purchase date is in the future, there’s no way of having the future market value of a bond.