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What is the annual coupon yield on the bond

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Reference no: EM132964979

Problem 1: We know that the Yield-to-Maturity can always be decomposed into a Coupon Yield (Coupon/P0) plus a capital gain or loss component. Assume that we are referring to the 2.75% coupon, 50-year bond issued by Canada April 28th, 2014. Assume that it is now April 28th, 2024 and the current yield on this bond is 7%. What is the annual Coupon Yield on this bond?

Multiple Choice

Option 1: 5.25%
Option 2: 2.85%
Option 3: 4.66%
Option 4: 6.37%

Reference no: EM132964979

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