Monkendrick purchased a$1000 par value bond with 4% annual coupons, maturing in 24 years, and redeemable at par. He bought the bond at a premium to yield 3% per annum. The bond was actually called 18 years later, just after the 18th coupon, at 107% of par value.

What was Monkendrick's rate of return on this investment?

Monkendrick purchased a $1000 par value bond with 4% annual coupons, maturing in 24 years, and redeemable at par. He bought the bond at a premium to yield 3% per annum. The bond was actually called 18 years later, just after the 18th coupon, at 107% of par value. What was Monkendrick's rate of return on this investment? Possible Answers