A coupon bond has two years to maturity, a face value of $1,000 and a coupon rate of 4%. You buy the bond at par, and, after 1 year, market yields fall to 2%. Find the rate of return on your bond for the first year.

Question

Quizplus · Accepted Answer

The Answer of A coupon bond has two years to maturity, a face value of $1,000 and a coupon rate of 4%. You buy the bond at par, and, after 1 year, market yields fall to 2%. Find the rate of return on your bond for the first year.

A Coupon Bond Has Two Years to Maturity, a Face