Finance - Calculating Coupon Rate

Apr 20th, 2015
Price: $50 USD

Question description

You purchased a newly issued on year, semiannual coupon risk free bond with a face value of $1,000 yesterday for $950.00. However, you forgot what the coupon rate of the bond is. Use the information provided in the table below to determine what the coupon rate on your bond is:

Price of Zero Coupon Bond     Time to Maturity of Zero Coupon Bond

$970                                               1 month

$950                                               3 months

$945                                               6 months

$930                                              9 months

$920                                              12 months

$900                                              15 months

$881                                              18 months

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