You Own a Principal STRIPS That Is Based on a 4.5

question 98

Multiple Choice

You own a principal STRIPS that is based on a 4.5% coupon Treasury bond that matures in 20 years. The STRIPS is priced at $22,868 and has a par value of $50,000. What is the yield to maturity on the STRIPS?

• A)3.79%
• B)3.90%
• C)3.93%
• D)3.95%
• E)3.99%

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