Question
Sarah buys an 8.4% coupon bond today that matures in ten years, pays semi-annual interest and has a yield to maturity of 4.6%. What is
Sarah buys an 8.4% coupon bond today that matures in ten years, pays semi-annual interest and has a yield to maturity of 4.6%. What is the annual rate of return on this bond if Sarah sells it one year from today when its yield to maturity is 7.5%? Assume that the coupon interest is not reinvested.
a. -15.50% b. 4.60% c. -12.27% d. 7.50% e. -18.72%
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Get StartedRecommended Textbook for
Investments Analysis and Management
Authors: Charles P. Jones
12th edition
978-1118475904, 1118475909, 1118363299, 978-1118363294
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