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Bonds Prices over time (discount). An investor buys a newly issued annual bond that pays its coupons once a year. The bonds coupon rate is
Bonds Prices over time (discount).
An investor buys a newly issued annual bond that pays its coupons once a year. The bonds coupon rate is 9%, its time to maturity is 4 years, and the yield to maturity is 13%. The investor will hold the bond until its maturity date.
Calculate the Bond Price, the current yield, capital gains, and the annual return for each year.
Answer current yield, capital gains and annual return as a percent (XX.XX)
Time | 0 | 1 | 2 | 3 | 4 |
Price | 1,000 | ||||
Current Yield | |||||
Capital Gains | |||||
Holding Period Return |
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