(Answered) 1 a 5000 bond is trading for 4950 the bonds current yield

Economics

1. A $5,000 bond is trading for $4,950. The bond's current yield CY is 0.035. What is the bond's coupon rate?

2. Assume a bond with $15,000 face value and a coupon rate of 3.2 % has 4 years to its maturity. An investor pays $99 per $100 face value and purchases the bond.

(a) What is the bond's approximate YTM?

(b) What is the bond's exact YTM (assume annual compounding and coupon payment)?

(d) What is the investor's rate of return?

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