Question
A bond is selling at 100% of its par value right now. It has 8% annual coupon rate. You bought this bond ten years ago
A bond is selling at 100% of its par value right now. It has 8% annual coupon rate. You bought this bond ten years ago at 95% of its par value.
If you sold this bond today, what is your realized yield?
You must round up answer to 2 decimals, and write your answer without the percentage sign. (For example, if your answer is 5.80%, you must write 5.80)
Step by Step Solution
3.39 Rating (152 Votes )
There are 3 Steps involved in it
Step: 1
Since the bond is currently selling at 100 of its par value it means the market interest rate equals ...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting
Authors: Jan Williams, Susan Haka
17th Edition
126000645X, 9781260006452
