Solution-Coupon payments every six months

Coupon payments every six months

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Reference no: EM131952237

1) Bond A is a one-year, zero coupon bond priced at $99.43. I.e., You pay $99.43 today for a claim to $100 one year from today.

2) Bond B is a two - year , semi annual coupon bond with 5 % coupon and priced at $105.54. I.e., You pay $105.54 today for a claim to $100 years from today plus coupon payments every six months, including the maturity date, equal to 2.5 % x $100 = $2.50.

3) Bond C is a three - year, semi - annual coupon bond with a 3% coupon and priced at $100. I.e., You pay $100 today for a claim to $100 three years from today plus coupon payments every six months, including maturity date , equal to 1.5 % x $ 100 = $1.50

Q= What is the (annual) yield to maturity for Bond A?

Reference no: EM131952237

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Coupon payments every six months

Reference no: EM131952237

Reference no: EM131952237

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