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Please help me understand how to calculate total return on a zero-coupon bond. It was purchased a year ago at $278.83, market interest rate is
Please help me understand how to calculate total return on a zero-coupon bond. It was purchased a year ago at $278.83, market interest rate is 8%, compounded semiannually. Bond had 17 years to maturity when originally purchased. What was total return.
I used the 278.83 times 8%, then return/278.83
I compounded it semiannually to get an ending price of $301.58, change/278.83
Neither of those gave me the right answer. What am I missing? Thanks!
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