At the beginning of the year, you bought a $ 1,000 par value corporate bond with a 6 percent annual coupon rate and a 10 year maturity date When you bought the bond, it had an expected yield to maturity of 8 percent Today the bond sells for $ 1,060 a What did you pay for the bond b If you sold the ...

a The value of the bond was 86580 b ...

At the beginning of the year, you bought a $ 1,000 par value corporate bond with a

Question:

At the beginning of the year, you bought a $ 1,000 corporate bond with a 6 percent annual rate and a 10- year date. When you bought the bond, it had an expected yield to of 8 percent. Today the bond sells for $ 1,060.
a. What did you pay for the bond?
b. If you sold the bond at the end of the year, what would be your one- period return on the investment? Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...