The following function calculates the coupon rate. Please complete the blanks within the function $($bond$\_$value: current bond price, par: par value, ttm: time to maturity, and y: yield$).$A bond price is the present value of all future cash flows $($coupon

interest every year and par value at maturity$)$ as shown in Ch $9$ course

material. That is$,$

Bond price $={\displaystyle \underset{i=1}{\overset{t}{}}}\frac{\text{P}\text{a}\text{r}{c}_{-}\text{r}\text{a}\text{t}\text{e}}{(1+y{)}^i}+\frac{\text{P}\text{a}\text{r}}{(1+y{)}^t},$

where

Par: par value of the bond

c$\_$rate: annual coupon rate

t: time to maturity

y: bond yield

Now, you have to find the coupon rate when we know all other

variables, such as the bond price, par value, time to maturity, and yield.

In order to find the coupon rate, you can use the following formula $($if

you solve the equation above for c$\_$rate, you can easily obtain this

formula$).$

$c_r$ate $=\frac{\text{B}\text{o}\text{n}\text{d}\text{p}\text{r}\text{i}\text{c}\text{e}-\frac{\text{P}\text{a}\text{r}}{(1+y{)}^t}}{{\displaystyle \underset{i=1}{\overset{l}{}}}\frac{\text{P}\text{a}\text{r}}{(1+y{)}^i}}.$

Answer the following questions $($#$1$ and #$2).$

The following function calculates the coupon rate. Please complete the blanks within the

function $($bond$\_$value: current bond price, par: par value, ttm: time to maturity, and y: yield$).$

Suppose you are investing in a bond that has the current bond price of $$1,172\mathrm{.}61,$ the par

value of $$1,000,10$ years to maturity, and the yield $($discount rate$)$ of $6\%.$ Using the function

in Question #$1,$ you would be able to calculate coupon rate of the bond. What is the coupon

rate $(\%)$ of the bond?