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A $1000 Bond Pays Semi-Annual Coupons of $60

Question 80

Multiple Choice

A $1000 bond pays semi-annual coupons of $60.The bond is bought for $1080 on October 16,2010 (no coupon is paid that day) and is sold for $1050 on April 16,2015 (just after the coupon is paid that day) .Using the method of averages,what is the yield rate,j2,earned over the period?


A) 10.64%
B) 10.70%
C) 11.83%
D) 11.70%

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