Gugenheim offers 12-year coupon bonds with semiannual payments.The yield to maturity is 6.23 percent,and the bonds sell at 101 percent of par.What is the coupon rate?

Question

Quizplus · Accepted Answer

1.01 × $1,000 = C × ({1 - 1 / [1 + (0.0623 / 2)]¹²^×2} / (0.0623 / 2))+ {$1,000 / [1 + (0.0623 / 2)]^12×2} C = $31.75 11ea6c22_9303_f7a5_9716_85f71a6cec00_TB1200_00 Coupon rate = ($31.75 × 2)/ $1,000 = 0.0635,or 6.35%

Gugenheim Offers 12-Year Coupon Bonds with Semiannual Payments