Question

A $1,000 face value bond is selling for $1,016.36. The bond pays interest semiannually and has 3.5 years to maturity. The yield to maturity is 5.48 percent. The current yield is _____ percent and the coupon rate is _____ percent.

Answer 1

current yield of bond = 5.90%

The coupon rate = 6.00%

Step-by-step explanation:

Given :

Years to maturity = 3.5 years

Face value = 1000

Bond selling price = $1016.36

Yield to maturity = 5.48% with interest compounded semiannually

Using a financial calculator :

The current yield of bond = 5.90%

The coupon rate = 6.00%