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A 10-year, 9% bond pays semi-annual coupon payments. If the face value is $1,000 but the bond sells for $1,050, what is the annualized yield on the bond?.

Sagot :

Given the face value of the bond, its coupon payments and the price of the bond, the bond's yield is 4.13%.

What is the bond's yield?

Bond's yield is the rate of return that can be expected from the bond given its coupon payment, face value and the price of the bond.

Bond yield can be determined using a financial calculator.

  • Cash flow in year 0 = -1050
  • Cash flow each year from period 1 to 20 = (9/2) x 1000 = 45
  • Cash flow in year 20 = 1000

Bond yield = 4.13%

To learn more about bond yield, please check: https://brainly.com/question/27287677

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