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In March 2018, Daniela Motor Financing (DMF), offered some securities for sale to the public. Under the terms of the deal, DMF promised to repay
In March 2018, Daniela Motor Financing (DMF), offered some securities for sale to the public. Under the terms of the deal, DMF promised to repay the owner of one of these securities $5,000 in March 2048, but investors would receive nothing until then. Investors paid DMF $850 for each of these securities; so they gave up $850 in March 2018, for the promise of a $5,000 payment 30 years later. a. Assuming you purchased the bond for $850, what rate of return would you earn if you held the bond for 30 years until it matured with a value $5,000?
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