question archive A bond maturing in fifteen years has a a current price of $825
A bond maturing in fifteen years has a a current price of $825
Subject:FinancePrice:2.86 Bought3
A bond maturing in fifteen years has a a current price of $825.65, yield to maturity of 9.25%, a face value of $1,000. What is the coupon rate of an annual bond?
Select one: A. 7.92% B. 7.35% C. 7.06% D. 7.57%
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| K = N |
| Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k] + Par value/(1 + YTM)^N |
| k=1 |
| K =15 |
| 825.65 =∑ [(Coupon rate*1000/100)/(1 + 9.25/100)^k] + 1000/(1 + 9.25/100)^15 |
| k=1 |
| Coupon rate% = 7.06 |
| Using Calculator: press buttons "2ND"+"FV" then assign |
| PV =-825.65 |
| I/Y =9.25 |
| N =15 |
| FV =1000 |
| CPT PMT |
| Using Excel |
| =PMT(rate,nper,pv,fv,type)/par value |
| =PMT(9.25/(100),15,-825.65,1000,)/1000 |
