§ An 8% coupon, 30-year bond is selling at
$1276.76.  First solve the following equation:
§ This equation is solved by r = 0.03.
§ The yield-to-maturity is given by 2 x 0.03 = 6%
§ The effective annual yield is given by (1.03)2 - 1 =
6.09%