Sep/ Dec 17 Q1 Conejo

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September 4, 2019 at 5:29 pm #544830
Michael
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Hi John,

In the coupon rate required from the new bond. The answer days 4.5665R + 83.71 = 100 this I understand. But then R = 3.57. how is 3.57 arrived at?

Thanks in advance
September 4, 2019 at 10:09 pm #544927
John Moffat
Keymaster
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By simple algebra !!

4.5665R + 83.71 = 100

subtract 83.71 from both sides:

4.5665R = 16.29

Divide both sides by 4.5665:

R = 3.57

!!
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