A $1,000 par value bond is currently valued at $1,055.The bond pays interest semi-annually,has 10 years to maturity,and has a yield to maturity of 7.3 percent.The coupon rate is ________ percent and the current yield is ________ percent.

Question

Quizplus · Accepted Answer

Using a financial calculator:
 11ea6d0e_c3ec_8a39_b3c7_a3d3b3f2eba4_TB1223_00 Coupon rate = ($40.42 × 2)/$1,000 = 8.08 percent
Current yield = ($40.42 × 2)/$1,055.00 = 7.663 percent

A $1,000 Par Value Bond Is Currently Valued at $1,055