Question

A 10% coupon bond maturing in 10 years that requires annual payments is expected to make...

A 10% coupon bond maturing in 10 years that requires annual payments is expected to make all coupon payments but to pay only 50% of par value at maturity. What is the expected yield on this bond if the bond is purchased for $975?

  • 11.00%

  • 6.68%

  • 10.00%

  • 8.68%

  • None of the options are correct.

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