What is the coupon rate for a bond with three years until maturity, a price of $1,053.46, and a yield to maturity of 6%?

Question

Quizplus · Accepted Answer

1. Press the FV button and enter the bond's price: 1053.46
2. Press the PV button and enter 1000, which is the face value of the bond.
3. Press the N button and enter 3, which is the number of years until maturity.
4. Press the PMT button to solve for the coupon payment.
5. Finally, press the I/Y button and enter the yield to maturity: 6%
The calculated coupon payment would be $90.58 per year. Dividing this by the face value of $1000, we get a coupon rate of 9.06%. Since there is no option for 9.06%, the closest answer is B), 8%.

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