(Q. 13 IN B) WHAT IS THE COUPON RATE ON A 6-YEAR BOND, PAYING SEMI...

15. (Q. 13 in B) What is the coupon rate on a 6-year bond, paying semi-annual coupons, with a $1,000 face value and selling at $1,050 if the yield to maturity is 4%? A) 2.4728%B) 4.0478% C) 4.9456% D) 4.9538% Solution C $1,050 = PMT x PVIFA(2%,12) + $1,000 x (1+i)

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PMT = $24.7280 Cpn rate = 4.9456%