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If a bond with a face value of $1,000, 8 years to maturity, semiannual coupons, and the yield to maturity of 4% sells for $1,067.89, what is its annual coupon rate? A. 4% B. 5% C. 2% D. 3% E. 2.5%

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Answer #1

Face Value = 1000 Time = 8x2= 16 periods gton = 4/= 2% Present value = 1067.89 Using financial calculator, fu=1000 N=16 yy=2

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