Homework Answers
Annual coupon rate = 8.10% semi annual payments
As the bonds sell at par,
Nominal rate = Annual coupon rate = YTM
Nominal rate = 8.1%
As the coupons are paid semi annually,
Effective annual rate = (1+8.1%/2)^2 -1
= 8.26%
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Question 10 Eagle Industries' bonds have a 10-year maturity and a 8.10% coupon paid semiannually. They...
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