Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85 . What is the nominal yield?
A. cannot be determined
B. 5.88%
C. 5.1%
D. 5.00%
Answer:D
Bubba buys a 5% municipal bond maturing in 15 years that is trading at a market price of 85 . What is the nominal yield?
A. cannot be determined B. 5.88% C. 5.1% D. 5.00%
Explanation: 5.00%. The nominal yield is the coupon rate on the bond.