Question
Bonds of Francesca Corporation with a par value of $1,000 sell for $940, mature in six years, and have a 7% annual coupon rate paid
Bonds of Francesca Corporation with a par value of $1,000 sell for $940, mature in six years, and have a 7% annual coupon rate paid semiannually. Do not round intermediate calculations. Round your answers to two decimal places. Calculate:
-
current yield.
% annually
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yield to maturity, to the nearest basis point.
% annually
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horizon yield (or realized return) for an investor with a four-year holding period and a reinvestment rate of 5% over the period. At the end of four years, the 7% coupon bonds with two years remaining will sell to yield 7%.
% annually
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