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Consider two 30-year bonds with the same purchase price. Each has an annual coupon rate of 5% paid semiannually and a par value of 1000.
Consider two 30-year bonds with the same purchase price. Each has an annual coupon rate of 5% paid semiannually and a par value of 1000. The 1st bond has an annual nominal yield rate of 5% compounded semiannually and a redemption value of 1200. The 2nd bond has an annual nominal yield rate of j compounded semiannually and a redemption value of 800. Calculate j. Possible answers are: 3.53 or 2.20 or 4.69 or 4.40 or 2.34 percent. Thanks!
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