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Suppose a U.S. bond priced at $975 pays $34 semi-annually for 20 years. Find the coupon...

Suppose a U.S. bond priced at $975 pays $34 semi-annually for 20 years. Find the coupon rate. Express your answers as a percentage. Make sure to round your answers to the nearest 100th percentage point.

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Answer #1

Annual Coupon = Semi Annula Coupon * 2

= $ 34 * 2

= $ 68

Coupon Rate = Coupon AMount / Face Value

= $ 68 / $ 1000

= 0.068 i.e 6.80%

Coupon Rate is 6.80%

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