Question

An investor is considering the purchase of the bond with the face value of 21000 with the
coupon rate of 12% and maturity period of 5 years. If the investor wants a yield of 14°9,
What is the maximum price he should be ready to pay for this bond'? If the bond is selling
for 2990 What would be his yield?​

Answer 1

Answer:

A bond's coupon rate denotes the amount of annual interest paid by the bond's issuer to the bondholder. Set when a bond is issued, coupon interest rates are determined as a percentage of the bond's par value, also known as the "face value." A $1,000 bond has a face value of $1,000. If its coupon rate is 1%, that means it pays $10 (1% of $1,000) a year.

Explanation:

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