Question
An IBM bond carries a coupon rate of 6%, has a 4-year to maturity and sells at par. (a) Create a time line below that
An IBM bond carries a coupon rate of 6%, has a 4-year to maturity and sells at par.
(a) Create a time line below that shows the cash flows of the bond.
(b) What will the bonds price be one year later when the yield to maturity has fallen by 1%?
(c) If you sold the bond at the price determined in (b) above what would your holding period return (HPR) be?
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Principles Of Managerial Finance
Authors: Lawrence J Gitman, Chad J Zutter
7th Edition
0133546403, 9780133546408
