Question
a. Face value, $1,000; market price, $1,000; term to maturity, 10 years, yield to maturity, 4% per annum; annual coupons. What is the coupon rate?
a. Face value, $1,000; market price, $1,000; term to maturity, 10 years, yield to maturity, 4% per annum; annual coupons. What is the coupon rate? Show answer as a percentage, correct to 2 decimal places.
b. Face value $1,000; market price, $900; term to maturity 9 years; yield to maturity 4.5% per annum; annual coupons. What is the coupon rate? Show answer as a percentage, correct to 2 decimal places.
c. Face value, $1,000: market price $900, term to maturity, 9 years; yield to maturity, 4.5% per annum (nominal rate); half-yearly coupons; What is the coupon rate? Show answer as a nominal percentage annual rate, correct to 2 decimal places.
d. Face value , $1,000; market price $750; term to maturity, 5 years; zero coupon bond. What is the yield to maturity? Show answer as a percentage annual rate, correct to 2 decimal places. e. In answer d.., if the expected inflation rate over the next 5 years is 2.25% per annum, what will be the real yield to maturity (or the real annual return)? Show answer as a percentage, correct to 2 decimal places.
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