Delta bonds are priced at $989.64,have a yield to maturity of 7.18 percent,pay semiannual payments,have a face value of $1,000,and have 6.5 years to maturity.What is the coupon rate?

Question

Quizplus · Accepted Answer

$989.64 = C × ({1 - 1 / [1 + (0.0718 / 2)]^6.5^×2} / (0.0718 / 2))+ {$1,000 / [1 + (0.0718 / 2)]^{6.5 ×2}} C = $34.89 11ea6c22_9303_f7a6_9716_67cfe7dae6a9_TB1200_00 Coupon rate = ($34.89 × 2)/ $1,000 = 0.0698,or 6.98%

Delta Bonds Are Priced at $989