Bond Yield Measurement: Examples
§An 8% coupon, 30-year bond is selling at $1276.76.  First solve the following equation:
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§This equation is solved by r = 0.03.
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§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%