You have just purchased a 15-year,$1,000 par value US Government bond for $909.20.The yield to maturity on the bond is 8.6%.What is the coupon rate?

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P_bond = C × 11ea7fdb_fbfd_f0a5_a768_8f6a4eef8602_TB2902_11 + 11ea7fdb_fbfe_17b6_a768_f50174b22cda_TB2902_11 909.20 = C × 11ea7fdb_fbfe_17b7_a768_69244225c044_TB2902_11 + 11ea7fdb_fbfe_17b8_a768_e3d5d8956b00_TB2902_11 619.096 = C × (8.2546) C = 75, so coupon rate = 11ea7fdb_fbfe_17b9_a768_abcb0c598eea_TB2902_11 = 11ea7fdb_fbfe_17ba_a768_697bfae22bf8_TB2902_11 = 7.5% Using a financial calculator: N = 15, I/Y = 8.6, FV = 1,000, PV = -909.20, CPT PMT = 75 Coupon Rate = 11ea7fdb_fbfe_17bb_a768_11f08eb1cd34_TB2902_11 = 11ea7fdb_fbfe_3ecc_a768_d5ea29193fc5_TB2902_11 = 7.5%

You Have Just Purchased a 15-Year,$1,000 Par Value US Government