Calculating the implied interest rate for coupon bonds

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Reference no: EM131962255

The implied interest rate of a bond (to the nearest tenth of a percent) with face value $100 that matures in two years and pays coupons of $5 per year and is currently valued at $98.00. [Note: In general, calculating the implied interest rate for coupon bonds requires a numerical root finding technique (such as a bisection method, divide and conquer, or Newton's method) to approximate the solution as the generated equations are generally not solvable in exact form for anything more than a modest number of coupon payments.]

Reference no: EM131962255

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