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Four years ago, you purchased fifteen $1,000 face value bonds of ABC Ltd. The bonds have a coupon rate of 7.35%, paid semi-annually. When you
Four years ago, you purchased fifteen $1,000 face value bonds of ABC Ltd. The bonds have a coupon rate of 7.35%, paid semi-annually. When you bought the bonds, their market yield rate was 6.25% with fifteen years left to maturity.
a)How much did you originally pay for the ABC Ltd.?
b) If the current market rate on similar bonds is 7.25%, what is the current market price per bond?
c) If you sell all of your ABC Ltd. bonds today, what overall rate of return did your earn on the bonds?
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