Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Quade, Inc. bonds have a 4% coupon rate with semiannual coupon payments and a $1,000 par value. The bonds have 11 years until maturity, and sell for $990. What is the current
yield for Quade's bonds?
OA. 4.32%
OB. 2.02%
OC. 6.95%
OD. 3.45%
O E. None of the above.
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Transcribed Image Text:Quade, Inc. bonds have a 4% coupon rate with semiannual coupon payments and a $1,000 par value. The bonds have 11 years until maturity, and sell for $990. What is the current yield for Quade's bonds? OA. 4.32% OB. 2.02% OC. 6.95% OD. 3.45% O E. None of the above.
Expert Solution
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Annual coupon amount (C) = $40 (i.e. $1000 * 0.04)

Current price (P0) = $990

Current yield = ?

 

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