What is the coupon rate? Suppsoe a year later, Jake pockets in the first coupon and immediately sell the bond. As a result, he earns 6% for that one year. How much does he sell the bond for? Given the selling (market) price in Part 2, what is the YTM a year later?
What is the coupon rate? Suppsoe a year later, Jake pockets in the first coupon and immediately sell the bond. As a result, he earns 6% for that one year. How much does he sell the bond for? Given the selling (market) price in Part 2, what is the YTM a year later?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
A Treasury coupon bond has 5-year to maturity with a face value of $1,000 and a current market price of $1,024.24. The bonds pay coupon annually and have a yield to maturity of 4 percent. Jake just purchased the bond at the current market price.
What is the coupon rate?
Suppsoe a year later, Jake pockets in the first coupon and immediately sell the bond. As a result, he earns 6% for that one year. How much does he sell the bond for?
Given the selling (market) price in Part 2, what is the YTM a year later?
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