Question
Jamal owns two 10-year bonds that both have a yield to maturity of 4% that pay interest annually. One bond has a 4% coupon and
Jamal owns two 10-year bonds that both have a yield to maturity of 4% that pay interest annually. One bond has a 4% coupon and trades at 100% (par). The other bond has a 2% coupon and trades at 83.78%.
a. What is the current yield of the 4% bond?
b. What is the current yield of the 2% bond?
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Essential Mathematics For Economic Analysis
Authors: Knut Sydsaeter, Peter Hammond, Arne Strom
4th Edition
0273760688, 9780273760689
