Question

An investor purchases two bonds with the following properties: Bond 1: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 7.7% annual and was purchased for $1200.71. Bond 2: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 5.9% annual and was purchased for $1072.14. If both bonds mature in the same number of years and the investor yields the same rate on both bonds, find the yield rate (as a percent correct to 2 decimal places).

Answer 1

Bond . Bona T 7 1000-laD671 1000 + 0071 000 +107 2 -72.4) 2D0.7 77 없00.7 } 100.3SS 59 72.41 036,20S lo36. 20 77m-80071 59n-72.4 77m a00.7 77n 2007, n = 62.65260 n.76.893Boh lu. 347yn1&3.10 7198347 n Yield Rate-B58 3.580 ウ8-58