Bond Return
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What is the % market yield on a $1,000 bond that currently sells for $627.76 that is an 8% coupon rate bond that has 15 years remaining before maturity? Is it 7, 8, 14, or 16% and how do you solve this? Please show me the steps.
Thank you.
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Solution Summary
The following posting helps with a finance-related problem. This solution is comprised of a detailed explanation to answer what is the % market yield on a $1,000 bond. Step by step calculations are given for each.
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Bond Return
What is the % market yield on a $1,000 bond that currently sells for $627.76 that is an 8% coupon rate bond that has 15 years remaining before maturity? Is it 7, 8, 14, or 16% and how do you solve this? Please show me the steps.
We need to calculate how much the bonds have been issued by using the formula as follows: -
where B is the issued price
C is the coupon payment
r is the discount or yield rate
n is the period
Because we need to ...
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