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    Coupon rate for a bond

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    When I looked up a bond, it was listed, with errors in the coupon rate, as &@*'s of 21, and the market price was listed as $1025.17. The market interest rate of the bond is 7.2 percent annually. What is the coupon rate?

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    Solution Preview

    The details of the bond are
    1. Current Price = $1,025.17
    2. Maturity = 2021 (the last 2 digits of 21 imply 2021 maturity) = 13 years from 2008
    3. Par Value = $1,000 (all bonds have this as ...

    Solution Summary

    The solution explains how to determine the coupon rate for a bond.