Answer:
Coupon rate is 6.62%
Explanation:
The question requires that we solve for the coupon rate on the bond.In order to do we first calculate the coupon payment on the bond semi-annually using the pmt formula in excel
=pmt(rate,nper,-pv,fv)
rate is 6.89%/2 because it is a six month yield to maturity that is needed
nper is the number of years to maturity multiplied by 2 i.e 23*2=46
pv is the current price of the bond i.e 96.849%*2000=$1936.98
fv is the future value at $2000
=pmt(6.89%/2,46,-1936.98,2000)
pmt=66.15 semi-annually
but 66.15*2=$132.3 annually
Coupon rate =pmt/face value
=132.30/2000
=6.62%
