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29 January, 14:20

Monica has a $1000 bond with a 5.5% coupon. Monica purchased this bond for $1025. What is the yield of this new bond?

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  1. 29 January, 16:11
    0
    Annual return on the bond is 1000*0.055 = $55 per year

    Yield = return/price = 55/1025 ≈ 0.0537 ≈ 5.4%
  2. 29 January, 16:12
    0
    Answer: the answer is 5.4% APEX
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