Question: Consider a 5-year semiannual payment floating-rate security whose coupon rate is determined as: reference rate + 65 basis points The current reference rate is 8%

Consider a 5-year semiannual payment floating-rate security whose coupon rate is determined as:

reference rate + 65 basis points

The current reference rate is 8% and bonds price is 98.5.

(1) What is the current coupon rate?

(2) What is the required yield of the floating-rate bond?

(3) What is the discount margin of the floating-rate bond?

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