Question
An investor purchases two bonds with following properties. Bond 1: Has a face value $1000 and is redeemable at par. Pays coupons annually at a
An investor purchases two bonds with following properties.
Bond 1: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 8.3% annual and was purchased for $1058.98.
Bond2: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 5.7% annual and was purchased for $892.29.
If both bonds mature in the same number of years and the investor yields the same rate on both bonds, find the yield rates (as a percent correct to 2 decimal places).
Answer is 7.38
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Fundamental Accounting Principles Volume I
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
16th Canadian edition
978-1260305821
