A 10-year, $2,000,000 bond is issued for $2,066,685.86, and it pays interest twice a year. The...
A 10-year, $2,000,000 bond is issued for $2,066,685.86, and it pays interest twice a year. The coupon rate is 4%. What is the effective rate?
Homework Answers
Solution:-
To Calculate Effective Rate-
Annual Effective Rate = 1.80% * 2
Effective Rate = 3.60%
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