MrA Purchases a $10,000 Bond with Semi-Annual Coupons at J₂

Mr.A purchases a $10,000 bond with semi-annual coupons at j₂ = 8%,maturing at par in 5 years for $10,415.83.Mr.A immediately sells the bond coupons and the remaining strip bond.He sells the coupons for $3500.83.After he has sold both pieces,he has made a total profit of $525.94.At what yield rate,j₂,did he sell the strip bond at?

A) 6.00%
B) 6.09%
C) 7.52%
D) 9.16%

Correct Answer:

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