What is the coupon rate of a bond that makes semi-annual coupon payments of $30 each,...

What is the coupon rate of a bond that makes semi-annual coupon payments of $30 each, is selling on the market for $1200, and has a par value of $1000?

Expert Solution

Coupon rate of a bond = Annual coupon / Par value

Coupon rate of a bond = ($30 * 2) / $1000

Coupon rate of a bond = 0.06 or 6%

jeff jeffy answered 2 years ago

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