Question
A five-year, 5.2% semiannual coupon payment government bond is priced at 96 per 100 of par value. Calculate the annual yield-to-maturity stated on a semiannual
A five-year, 5.2% semiannual coupon payment government bond is priced at 96 per 100 of par value. Calculate the annual yield-to-maturity stated on a semiannual bond basis, rounded to the nearest basis point. Convert that annual yield to:
A. an annual rate that can be used for direct comparison with otherwise comparable bonds that make annual coupon payments.
A. an annual rate that can be used for direct comparison with otherwise comparable bonds that make quarterly coupon payments and
B. an annual rate that can be used for direct comparison with otherwise comparable bonds that make monthly coupon payments.
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