You're optimizing a client's Shopping campaign to drive online sales and are assessing the company's website. You determine that
1 answer:
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Answer: 2%
Explanation:
As the coupon payments are semi-annual, you need to convert the other measures to semi-annual measures as well.
Coupon rate = 6%/2 = 3% per semi annum
Coupon payment = 3% * 1,000 which is par value = $30
Time to maturity = 12 * 2 = 24 semi annual periods
Price is still the same = $1,189.14
You can use an Excel worksheet to solve for the Yield:
Number of periods = 24
Payment = $30
PV = 1,189.14
FV is par value of $1,000
Periodic rate is 0.019999
= 2%
