Calculating Bond Parameters - Part 2

Quantitative Finance Level 2

Consider a bond that will pay 5% per year for the next 10 years on a principal value of $1000. The interest rate is 7% throughout this time period.

What is the stated yield of the bond?

5.8% 5.0% 7.0% 6.2%

Calvin Lin by Calvin Lin

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1 solution

Chew-Seong Cheong
Apr 30, 2015

Stated yield of a bond is its coupon rate. In this case, it is 5.0 \boxed{5.0} %.

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