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A $1,000 face value bond is selling for $1,016.36. The bond pays interest semiannually and has 3.5 years to maturity. The yield to maturity is 5.48 percent. The current yield is _____ percent and the coupon rate is _____ percent.

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Answer:

current yield of bond = 5.90%

The coupon rate = 6.00%

Explanation:

Given :

Years to maturity = 3.5 years

Face value = 1000

Bond selling price = $1016.36

Yield to maturity = 5.48% with interest compounded semiannually

Using a financial calculator :

The current yield of bond = 5.90%

The coupon rate = 6.00%

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