The market price of a semi-annual pay bond is $985.50. It has 17 years to maturity...

The market price of a semi-annual pay bond is $985.50. It has 17 years to maturity and a yield to maturity of 7.26%. What is the coupon rate?

Expert Solution

The coupon rate is calculated using the PMT function as follows:-

=pmt(rate,nper,pv,fv)/fv

=PMT(7.26%/2,17*2,-985.5,1000)*2/1000

=7.11%

Where,

rate is periodic rate

nper is number of periods,

pv is present value

fv is future value

jeff jeffy answered 2 years ago

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