Question
A Treasury coupon bond has 5-year to maturity with a face value of $1,000 and a current market price of $1,024.24. The bonds pay coupon
A Treasury coupon bond has 5-year to maturity with a face value of $1,000 and a current market price of $1,024.24. The bonds pay coupon annually and have a yield to maturity of 4 percent. Jake just purchased the bond at the current market price. Attempt 1/3 for 10 pts.
Part 1 What is the coupon rate? 4+ decimals Attempt 1/3 for 10 pts.
Part 2 Suppsoe a year later, Jake pockets in the first coupon and immediately sell the bond. As a result, he earns 6% for that one year. How much does he sell the bond for? 0+ decimals Attempt 1/3 for 10 pts.
Part 3 Given the selling (market) price in Part 2, what is the YTM a year later? 4+ decimals
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