Question
Answer First Question with information from question below Use the information in the previous question (i.e., question 7 answered below). Bernie thinks he can reinvest
Answer First Question with information from question below
Use the information in the previous question (i.e., question 7 answered below). Bernie thinks he can reinvest the coupon payments at an annual interest rate of 10.2%. Bernie is planning to sell the bond at the end of year 3 when the bond will be selling to yield 12%. What is the annualized yield?
| A. | 27.69% | |
| B. | 17.49% | |
| C. | 6.21% | |
| D. | 6.97% |
Suppose that Bernie Sanders has an investment horizon of 3 years. He wants to buy a 7yr 9% coupon bond, semiannual pay, yielding 10% rate of return. Face value is 1000. What is the price of the bond now?
Answer is $950.51
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Financial Management Theory And Practice
Authors: Prasanna Chandra
11th Edition
9355322208, 978-9355322203
