Question
Please help, I will up vote! (Bond valuation) At the beginning of the year, you bought a $1,000 par value corporate bond with an annual
Please help, I will up vote!
(Bond valuation) At the beginning of the year, you bought a $1,000 par value corporate bond with an annual coupon rate of 16 percent and a maturity date of 18 years. When you bought the bond, it had an expected yield to maturity of 9 percent. Today the bond sells for $1,910.
a. What did you pay for the bond? The price you paid for the bond is $ ___ . (Round to the nearest cent.) b. If you sold the bond at the end of the year, what would be your one-period return on the investment? Assume that you did not receive any interest payment during the holding period. If you sold the bond today, your one-period return on the investment is %___. (Round to two decimal places.)
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