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What is the yield of a 3-year bond with a coupon rate of 7% and face...

What is the yield of a 3-year bond with a coupon rate of 7% and face value of $100? Assume the bond is currently trading at a price of $100, and that coupons are paid semi-annually. Assume semi-annual compounding.

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Expert Solution

When bonds trade at par, the YTM = same as coupon rate = 7%

so yield = 7%, we can also prove using calculation, see below image

Any doubts, feel free to ask. Thumbs up please

jeff jeffy answered 2 years ago
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