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19-03-2017
Mathematics

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A $1,000 face value bond is currently quoted at 100.8. the bond pays semiannual payments of $22.50 each and matures in six years. what is the coupon rate?

Respuesta :

01-04-2017

We are given with
F = 1000
b = 22.50
P = 100.8

We use the formula to get the coupon rate
b = Fib
Substituting the given values
22.50 = 1000 ib
ib = 0.0255 or 2.25%

The coupon rate is 2.25%

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