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QUESTION

A $40,000 bond with semi-annual coupon payments at 5.5% compounded semi-annually is redeemable at par in 12 years. Calculate the yield rate if the...

A $40,000 bond with semi-annual coupon payments at 5.5% compounded semi-annually is redeemable at par in 12 years. Calculate the yield rate if the bond is purchased at 102.5.

Select one:

a. 0.0622 (or 6.22%)

b. 0.0599 (or 5.99%)

c. 0.0681 (or 6.81%)

d. 0.0712 (or 7.12%)

e. 0.0523 (or 5.22%)

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