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Hey guys, I have a question, that has to be solved through Excel, can anyone help me? Assume the zero-coupon yields on default-free securities are
Hey guys, I have a question, that has to be solved through Excel, can anyone help me?
"Assume the zero-coupon yields on default-free securities are as summarized in the following table:
Maturity Zero Coupon Yields
1 year 6.80 %
2 years 7.40 %
3 years 7.80 %
4 years 8.00 %
5 years 8.40 %
Consider a four-year, default-free security with annual coupon payments and a face value of $1,000 that is issued at par.
Question: What is the coupon rate of this bond? The par coupon rate is closest to:
A. 6.75%
B. 5.85%
C. 7.94%
D. 4.36%
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