Bonds A and B are two straight yen denominated international bonds, with the same maturity of four years and the same YTM of 9 percent Bond A has an annual coupon of 11 percent and is accordingly priced at 106 48 percent Bond B has an annual coupon of 7 percent and is accordingly priced at 93 52 pe...

a Simple yield Simple yield for Bond Simple yield for Bond b For Bond A which is selling above par ...

Bonds A and B are two straight yen-denominated international bonds, with the same maturity of four years

Question:

Bonds A and B are two straight yen-denominated international bonds, with the same of four years and the same YTM of 9 percent. Bond A has an annual of 11 percent and is accordingly priced at 106.48 percent. Bond B has an annual of 7 percent and is accordingly priced at 93.52 percent.
a. Compute the simple yield for each of these bonds, as reported sometimes by financial institutions in Japan.
b. What does your answer to part (a) indicate about the potential biases in using the simple 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... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...