4 A 1 0 year US Government bond with face value of $ 1 , 0 0 0 pays a yearly coupon of 4 1 2 5 a Calculate the present value of each coupon payment from year 1 to year 1 0 b If this bond sells today for $ 8 5 0 ( present value ) , what is the yield if there were no coupons c What is the overall yield considering it also pays yearly coupons

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4 . A 1 0 - year US Government bond with face value of $ 1 , 0 0 0 pays a yearly coupon of

4 .

10 -

year US Government bond with face value of $

1, 000

pays a yearly coupon of

4.125 % .

.

Calculate the present value of each coupon payment from year

1

to year

10 .

.

If this bond sells today for $

850 (

present value

),

what is the yield if there were no coupons?

.

What is the overall yield considering it also pays yearly coupons?

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