Question

Tim has a $5000 bond with a 4.6% coupon. Tim purchased this bond for $5195. What is the yield of this new bond

Answer 1

Answer:

  0.67%

Step-by-step explanation:

When Tim's bond matures, he will receive ...

  $5000 + 4.6% × $5000 = $5230

As a fraction of his investment, this is ...

  $4230/$5195 = 1.006737 = 1 + 0.67%

The yield for Tim is 0.67%.

Answer 2

Answer:

4.4%

Step-by-step explanation:

APE X