Question
A) considering the purchase of a $1,000 face value bond that pays 11% APR coupon interest but paid semi-annually. The bond matures in 20 years
A) considering the purchase of a $1,000 face value bond that pays 11% APR coupon interest but paid semi-annually. The bond matures in 20 years and has a current market price of $931.18. What is the bonds yield to maturity expressed as an annual% rate APR?
B) considering the sale of the $1,000 face value bond that pays 11% coupon interest, but paid semi-annually, that you bought in part a. As above, you paid $931.18 for the bond when you bought it five years ago and it now has 15 years to maturity. If you decide to sell your bond at the price of $975, what was your realized return as an annual % rate APR ?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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