What is the value of x

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A bond dealer wishes to make a profit from coupon stripping. The dealer buys a $10,000,000 3-year corporate par value bond that pays semi-annual interest at j2 = 8% and pays $10,000,000 for the bond. The dealer then strips the coupons and sells each of them separately, along with selling the resulting strip bond. The dealer will sell the coupons and the strip bond at the following yield rates (all are j2):

Maturity 0.5 years 1.0 years 1.5 years 2.0 years 2.5 years 3.0 years

Yield(j2) 3.4% 4.0% 4.6% 5.0% 5.4% x%

If the total profit made by the bond dealer is $32,013.75, what is the value of x?

Reference no: EM132780608

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