A four year bond with face value $100 and paying a coupon of 6% semiannually is trading at $110. What is yield of this bond? Assume the rate given is continuously compounded.
Yielld= coupon rate * par value/ current price
=((6*$100)/100). / $100
=((6 / 110)*100)
=5.45%
So. Yield of this bond is 5.45%
A four year bond with face value $100 and paying a coupon of 6% semiannually is...
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