What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $950, if it pays 8% fixed interest for the duration of the bond? yield = [?] %
What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $950, if it pays 8% fixed interest for the duration of the bond? yield = [?] %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![What is the yield on a corporate bond with a $1000
face value purchased at a discount price of $950, if
it pays 8% fixed interest for the duration of the
bond?
yield = [ ? ] %
Give your answer as a percent rounded to the nearest
hundredth.
Hint: yield = interest paid
price paid
Enter](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc69b946-6ab7-43e3-82e9-048fa0b60be9%2F3bbbc223-c281-4676-a783-2ee7a72395bf%2Fxuaoang_processed.jpeg&w=3840&q=75)
Transcribed Image Text:What is the yield on a corporate bond with a $1000
face value purchased at a discount price of $950, if
it pays 8% fixed interest for the duration of the
bond?
yield = [ ? ] %
Give your answer as a percent rounded to the nearest
hundredth.
Hint: yield = interest paid
price paid
Enter
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