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Answered

A bond has a $1,000 face value, a market price of $989, and pays interest payments of $69.50 every year. What is the coupon rate

Answer :

Answer:

6.95

Explanation:

Coupon rate = $69.50/$1,000 = .0695, or 6.95 percent

ABIOLATAIWO2015IN

Based on the information given the Coupon rate is 6.95%.

Coupon rate

Using this formula

Coupon rate=Interest payment/Face value

Where:

Interest payment=$69.50

Face value=$1,000

Let plug in the formula

Coupon rate=$69.50/$1,000

Coupon rate= .0695×100

Coupon rate=6.95%

Inconclusion  the Coupon rate is 6.95%.

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