Answer:
effective annual coupon rate = 10.77 %
Explanation:
given data
Coupon Rate = 10.50%
Type of Compounding = Semiannually
Number of Payments in a Year (n) = 2
solution
we get effective annual coupon rate that is
effective annual coupon rate = [tex](1+\frac{r}{n})^n - 1[/tex] ............................1
put here value and we get
effective annual coupon rate = [tex](1+\frac{0.1050}{2})^2 - 1[/tex]
effective annual coupon rate = 0.107756
effective annual coupon rate = 10.77 %
