Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3 years ago you bought a zero-coupon bond for $784. You just sold the bond for 1,000. What is your rate of return per year?

3 years ago you bought a zero-coupon bond for $784. You just sold the bond for 1,000. What is your rate of return per year? Please enter your answer as %. For example, if your answer is 2.34%, please enter 2.34. Round to two decimal places.

You just bought a bond for $876. The coupon rate is 4%, the face value is $1,000, and the maturity is 30 years. Compute the rate of return if you sell the bond in exactly one year after collecting the coupon. Assume that the YTM in 1 year will be 5%. Please enter your answer as %. For example, if your answer is 2.34%, please enter 2.34. Round to two decimal places.

You just bought a zero-coupon bond for $156. The face value is $1,000, and the maturity is 20 years. Compute the ANNUAL rate of return of your investment if you sell the bond in exactly 5 years. Assume that the YTM in 5 years will be 9%. Please enter your answer as %. For example, if your answer is 2.34%, please enter 2.34. Round to two decimal places.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Project Finance In Theory And Practice

Authors: Stefano Gatti

3rd Edition

0128114010, 978-0128114018

More Books

Students also viewed these Finance questions

Question

6. Describe why communication is vital to everyone

Answered: 1 week ago