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Iteru [2.4K]
3 years ago
15

Treasury bonds paying an 10.00% coupon rate with semiannual payments currently sell at par value. What coupon rate would they ha

ve to pay in order to sell at par if they paid their coupons annually?
Business
1 answer:
andrezito [222]3 years ago
3 0

Answer:

10.25%

Explanation:

The requirement which is Coupon rate can be calculated using EAR formula.

EAR = (1 + APR/n)^n - 1

EAR = (1 + 10.00%/2)^2 - 1

EAR = (1 + 0.1/2)^2 - 1

EAR = (1 + 0.05)^2 - 1

EAR = (1.05)^2 - 1

EAR = 1.1025 - 1

EAR = 0.1025

EAR = 10.25%

10.25% is the coupon rate for annually paying bond.

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3 years ago
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Ne4ueva [31]

Mortgage loans made to borrowers with normal credit quality, but who lack the necessary documentation of their financial circumstances typically needed to meet conforming mortgage standards would most likely be considered  alt-A loans.

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4 0
2 years ago
How does an expansionan expansion in the central​ bank's domestic assets ultimately affect its balance sheet under a fixed excha
vladimir1956 [14]

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Option D          

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3 years ago
Miami Solar manufactures solar panels for industrial use. The company budgets production of 4,800 units (solar panels) in July a
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Answer and Explanation:

The preparation of the factory overhead budget for August month is shown below:

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