Got this bond question and it seems the bond has a negative coupon payment. Is that possible?Or is there something here I am not seeing... perhaps I am not understanding the wordings of the question properly?Someone told me he thought this is asking if you sold the bond to someone else and now you get the coupon or something like that but I still don't understand it.A bond is sold at $923.14. The bond has 15 years to maturiy and investors require a 10% yield on the bond.What is the coupon rate for the bond if the bond pays coupon payments semiannually?

Generally bonds do not have a negative coupon; although I believe that a convertible issued by GenRe a few years back did have an effective negative coupon due to the cost of the call on gen re stock. Looking at your question, if you assume that the bond pays back a 1000 upon redemption then the problem is easy to solve and you get a coupon of about 8.78%.

In North America bonds trade "cum-coupon", which means that the holder of the bond at the time a coupon payment is made receives the coupon payment for the entire coupon period regardless of how long he/she has actually owned it. Because this is so, the buyer of a bond between coupon dates pays the seller accrued interest from the previous coupon date to the trade settlement date. Some European bonds used to and still may trade "ex-coupon", which means that if a bond trades within a predetermined number of days before a coupon payment, the seller will get the coupon payment, rather than the buyer. This is probably an artifact of archaic settlement practices, which took some time to settle bond trades (up to a month in some places not that long ago!). So for these slightly unusual bonds there is negative accrued within the ex-coupon period.

With PV=-923.14, FV=1000, i=5, and N= 30, I get an answer of 9.00%. What am I doing wrong?--j