4. James is a bond analyst at AB Financial Corporation. Given the current economic scenario, he thinks cashflows sooner
Posted: Fri Jul 01, 2022 7:56 am
- 4 James Is A Bond Analyst At Ab Financial Corporation Given The Current Economic Scenario He Thinks Cashflows Sooner 1 (38.13 KiB) Viewed 28 times
4. James is a bond analyst at AB Financial Corporation. Given the current economic scenario, he thinks cashflows sooner will be more valuable; hence, he plans to tilt the bond portfolio toward coupon-paying bonds. He observes that one of the bonds in his portfolio has 11.5 years to maturity, a YTM of 6.8%, a par value of $1,000, and a current price of $1,055. The bond makes semi-annual payments. He calculates the coupon rate on those bonds. What must be the number that he arrived at? a. 8.497% b. 7.497% C. 6.334% d. 5.358% e. None of the above