A 10-year Treasury note has a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know: Answer a. The present value is greater than its price b. The current yield is equal to 8.33% c. The coupon payment on this bond is equal to $75 d. The coupon payment on this bond is equal to $90
A 10-year Treasury note has a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know: Answer a. The present value is greater than its price b. The current yield is equal to 8.33% c. The coupon payment on this bond is equal to $75 d. The coupon payment on this bond is equal to $90
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 16P
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Question
A 10-year Treasury note has a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know:
Answer
a. The present value is greater than its price
b. The current yield is equal to 8.33%
c. The coupon payment on this bond is equal to $75
d. The coupon payment on this bond is equal to $90
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