A $1,000 par value bond is currently valued at $1,037.84.The bond pays interest semi-annually,has 7 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: Coupon rate = ($40 × 2)/$1,000 = 8.0 percentCurrent yield = ($40 × 2)/$1,037.84 = 7.708 percent

A $1,000 Par Value Bond Is Currently Valued at $1,037