A bond has two years to mature It makes a coupon payment of $100 after one year and both a coupon payment of $100 and a principal repayment of $1000 after two years The bond is selling for $966 What is its effective yield ...

Determine the interest rate that will yield a present value of 966 for an income stre ...

A bond has two years to mature. It makes a coupon payment of $100 after one year

Question:

A bond has two years to mature. It makes a payment of $100 after one year and both a payment of $100 and a principal repayment of $1000 after two years. The bond is selling for $966. What is its effective yield?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...