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How to do the last question about holding period return? You are considering purchasing a consol that promises annual payments of $4 a. If the
How to do the last question about holding period return?
You are considering purchasing a consol that promises annual payments of $4 a. If the current interest rate is 3.5 percent, what is the price of the consol? Instructions: Round your answer to the nearest penny (2 decimal places) The price of the consol is $ 114.29 b. You are concerned that the interest rate may rise to 6 percent. Compute the percentage change in the price of the consol and the percentage change in the interest rate. Compare them. Instructions: Round your answer for dollar amounts to the nearest penny (2 decimal places) and answers for percentages to the nearest tenth (1 decimal place) The new price of the consol would be $66.67 The price of the consol falls by | 41.7 % and the interest rises by | 71.41 %. C. Your investment horizon is one year. You purchase the consol when the interest rate is 5 percent and sell it a year later, following a rise in the interest rate to 6 percent. What is your holding period return? Instructions: Round your answer to the nearest tenth (1 decimal place) Your holding period return is L-11.70 %Step by Step Solution
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