Question
Bonds issued by XYZ have a par value of $1000, were priced at $1,140.00 six months ago, and are priced at $1,060.00 today. The bonds
Bonds issued by XYZ have a par value of $1000, were priced at $1,140.00 six months ago, and are priced at $1,060.00 today. The bonds pay semi-annual coupons and just made a coupon payment. If the bonds had a percentage return over the past 6 months (from 6 months ago to today) of -1.20%, then what is the current yield of the bonds today?
a. | 11.64% (plus or minus 0.05 percentage points) | |
b. | 9.54% (plus or minus 0.05 percentage points) | |
c. | 10.58% (plus or minus 0.05 percentage points) | |
d. | 12.51% (plus or minus 0.05 percentage points) | |
e. | None of the above is within 0.05 percentage points of the correct answer |
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