Current yield and coupon rate

    • [DOCX File]Measuring Yield - Leeds School of Business

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      The coupon is the reference rate plus 70 bps and the reference rate is 5%. Compute the discount margin if the price is 99.00 and 101.00. The discount margin is the YTM less the reference rate.

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    • [DOC File]Chapter 01 Quiz A

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      semiannual coupon. What is the current yield on these bonds? a. 3.45 percent b. 3.50 percent c. 6.78 percent d. 6.90 percent _____ 6. A semiannual corporate bond has a face value of $1,000, a yield to maturity of 8.7 percent, and a coupon . rate of 8.5 percent. The bond matures 15 years from today. This bond: a. has a current yield of 4.32 percent.

      coupon rate and yield rate


    • [DOC File]Bond Yields and Prices

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      Current Yield. annual coupon interest in dollars = C. Current yield = Current Price P. Does not account for capital gain (loss) Yield to maturity. Most commonly used. Promised compound rate of return received from a bond purchased at the current market price and …

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    • [DOC File]Quantitative Problems Chapter 10

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      The current yield 50/926.40 5.4%. 11. A $1,000 par bond with an annual coupon has only 1 year until maturity. Its current yield is 6.713% and its yield to maturity is 10%. What is the price of the bond? Solution: (1) CY .06713 Coupon/Price, or Coupon 0.06713 ( Price (2) Price (Coupon 1000)/1.10.

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    • [DOC File]Bond Features

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      Coupon rate or coupon yield: a bond’s annual coupon divided by its par value. Current yield: a bond’s annual coupon divided by the bond price. Yield to maturity. The market interest rate for bonds with similar features. This is the discount rate that equates a bond’s price with the …

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    • [DOC File]Sample midterm

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      current yield=coupon/price= 100/900=11.11%. yield to maturity=from calculator=1 1.75%. capital gain yield= yield to maturity-current yield=0.64%. 15. If an investor purchases a bond when its current yield is higher than the coupon rate, then the bond's price will be expected to: A) increase over time, reaching par value at maturity.

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    • [DOC File]Soln Ch 13 Bond prices

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      (iii) is wrong because adding the average annual capital gain rate to the current yield does not give the yield to maturity. For example, assume a 10-year bond with a 6% coupon rate paying interest annually and a YTM of 8% per year. Its price is $865.80. The average annual capital gain is equal to ($1000 – 865.80)/10 years = $13.42 per year.

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