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