Question
Suppose you buy a $10,000 face value Treasury bond with quarterly paid coupon rate of 10% per annum, maturing in six months for $9,700. On
Suppose you buy a $10,000 face value Treasury bond with quarterly paid coupon rate of 10% per annum, maturing in six months for $9,700. On the bonds maturity date, you collect face value. a) Find the holding-period return. b) Find the annual percentage rate. [Hint: APR = Per period rate Periods per year]
c) Find the effective annual rate.
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Financial Management Principles And Practice
Authors: Timothy J. Gallagher, Joseph D. Andrew
3rd Edition
0131768824, 978-0131768826
