An investor purchases two bonds with the following properties: Bond 1: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 7.3% annual and was purchased for $1090.28. Bond 2: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 6.5% annual and was purchased for $1017.33. If both bonds mature in the same number of years and the investor yields the same rate on both bonds, find the yield rate (as a percent correct to 2 decimal places). Answer: %
An investor purchases two bonds with the following properties: Bond 1: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 7.3% annual and was purchased for $1090.28. Bond 2: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 6.5% annual and was purchased for $1017.33. If both bonds mature in the same number of years and the investor yields the same rate on both bonds, find the yield rate (as a percent correct to 2 decimal places). Answer: %
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An investor purchases two bonds with the following properties:
Bond 1: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 7.3% annual and was purchased for $1090.28.
Bond 2: Has a face value $1000 and is redeemable at par. Pays coupons annually at a rate of 6.5% annual and was purchased for $1017.33.
If both bonds mature in the same number of years and the investor yields the same rate on both bonds, find the yield rate (as a percent correct to 2
decimal places).
Answer:
%
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