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Carrie's clothes, has a five year bond oustanding that pay $60 annually. The face value of each bond is $1,000, and the bond sells for $890.a. what is the bond's coupon rate?b. what is the current yield?c. what is the yield to maturity?

Question

Carrie's clothes, has a five year bond oustanding that pay $60 annually. The face value of each bond is $1,000, and the bond sells for $890.

a. what is the bond's coupon rate?

b. what is the current yield?

c. what is the yield to maturity?

check_circleAnswer
Step 1

a.

Calculation of Coupon Rate of Bond:

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Step 2

b.

Calculation of Current Yield:

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Step 3

c.

Calculation of Yield to Maturity:

The yield to maturity can be calculated using a excel function =RATE, which denotes the interest rate of any investment. The need of using a excel function here is to get accurate final a...

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