A zero-coupon bond has a yield to maturity of 5 nd a par value of $1,000 , for a 3 year 5.65% coupon rate bond.
What is coupon rate bond and what is the price today of a 3 year 5.65% coupon rate bond?
- Simultaneously of holding a bond , the annual income an investor can expect to recieve is what we call coupon rate bond.
- Here is mentioned a 3 year 5.65% coupon rate bond that returns the par value of thousand dollars at maturity.
- Purchasing a $1000 bond and if the coupon rate is 5% then the issuer provides the investor with 5% interest every year.
- Hence the zero coupon bond of a 3 year 5.65% coupon rate bond that returns the par value of thousand dollars at maturity if the yield to maturity is 12.50%.
To know more about coupon rate visit:
https://brainly.com/question/16913107
#SPJ4