A bond paying 5% coupons semiannually and YTM of 4.5% and 12 years to maturity. If the
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A bond paying 5% coupons semiannually and YTM of 4.5% and 12 years to maturity. If the last interest payment was made 30 days ago, what is the actual or dirty price of the bond? Assume 364 days a year.
2. If you buy a 25-yr, 6% annual coupon bond for $883.46 (when YTM is 7%) and plan to hold it for 15 yrs. If you forecast the YTM will be 7.50% when it is sold in 15 yrs, while the reinvestment rate is expected to be 6.6% in the first 15 years, what is your average annual rate of return (horizon yield)?
Related Book For
Essentials of Investments
ISBN: 978-0077835422
10th edition
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
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