what is the price today (in dollars and cents) of a 3-year 5.65% coupon rate bond that returns the par value of $1000 at maturity if the yield to maturity is 12.50%

Respuesta :

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?

  1. Simultaneously of holding a bond , the annual income an investor can expect to recieve is what we call coupon rate bond.
  2. Here is mentioned a 3 year 5.65% coupon rate bond that returns the par value of thousand dollars at maturity.
  3. Purchasing a $1000 bond and if the coupon rate is 5% then the issuer provides the investor with 5% interest every year.
  4. 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%.

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