5.7 Par yield The par yield for a certain maturity is the coupon rate that causes the bond price to equal its face value In our example we solve C e005×0.5C-005810,C064×15 +-e +100+-e -0.068×2.0 100 to get c=6.87(with s a compoundin g) Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 5.7 Par Yield • The par yield for a certain maturity is the coupon rate that causes the bond price to equal its face value. • In our example we solve to get 6 87 (with s.a. compoundin g) 100 2 100 2 2 2 0.068 2.0 0.0 5 0.5 0.058 1.0 0.064 1.5 c= . e c e c e c e c  =      + + + + −  −  −  − 