A 10% coupon, annual payments, bond maturing in 10 years, is expected to make all coupon payments, but to pay only 50% of par value at maturity.What is the expected yield on this bond if the bond is purchased for $975

Name: A 10% coupon, annual payments, bond maturing in 10 years, is expected to make all coupon payments, but to pay only 50% of par value at maturity.What is the expected yield on this bond if the bond is purchased for $975
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Question

Quizplus · Accepted Answer

FV = 500, PMT = 100, n = 10, PV = -975, i = 6.68%.

A 10% Coupon, Annual Payments, Bond Maturing in 10 Years