A municipal dealer quotes a 2 year, 8% term revenue bond at 106. The yield to maturity is:

Yield to maturity = 4.85%

Explanation:

Municipal dealers are dealers that are registered to buy and sell municipal bonds on behalf of clients.

Yield to maturity is defined as the internal rate of return on a purchased bond

The formula is given as

Yield to maturity = $80 - ($60 premium / 2 years to maturity) ÷

($1,060 + $1,000) / 2

Yield to maturity = ($80 - $30) ÷ 1,030

Yield to maturity = 50 ÷ 1,030 = 0.0485 = 4.85%

start by isolating the variable on one side by adding 43w^2 to both sides.   the equation will read:

25w^2+5=0

*subtract 5 from both sides*

25w^2=-5

*divide both sides by 25*

w^2=-1/5

*take the square root of both sides*

w=√(-1/5)

the square root of -1 is i.   the square root of 5 remains √5

the answer is i/√5.

hope this

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