Question
A bond with a par value of $100 is currently trading at a price of $104. The bond has a coupon rate of 4.16%, and
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A bond with a par value of $100 is currently trading at a price of $104. The bond has a coupon rate of 4.16%, and it has exactly 10 years remaining until maturity. What is the bond’s current yield?
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An investor buys a bond with a $100 par value and a 5% coupon rate for $97. The bond pays interest semiannually. Exactly one year later, just after receiving the second coupon payment, the investor sells the bond for $96. What was the investor’s rate of return over the year from owning the bond?
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Fixed Income Analysis
Authors: Barbara S. Petitt
5th Edition
1119850541, 978-1119850540
