Question
One year ago today you bought a 6% coupon bond with a face value of 100 and 5 years to maturity for a price of
One year ago today you bought a 6% coupon bond with a face value of €100 and 5 years to maturity for a price of €102.47. The bond pays interest annually.
In the meantime the yield to maturity for the bond has changed and is now 5%.
If you sell the bond today what would have been your rate of return over the past year?
Step by Step Solution
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Step: 1
To calculate the rate of return on a bond investment over the past year we can use the following for...
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Fundamentals Of Corporate Finance
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
6th Edition
0072553073, 9780072553079
