A year ago, Elena bought a Spanish government bond for 1,020 (euros) with a 5% coupon. Over
Question:
A year ago, Elena bought a Spanish government bond for €1,020 (euros) with a 5% coupon. Over the course of the next 12 months, interest rates drop sharply. As a result, she sells the bond at the current price of €1,100.
a. Find the current yield that existed on this bond one year ago and today.
b. Calculate the HPR return in euros for Elena.
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Calculations a One year ago Yield Coupon payment Price Par value ...View the full answer
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Labindao Antoque
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