Question
Suppose you buy a bond with a coupon of 7.4 percent today for $1,000. The bond has 14 years to maturity. Two years from now,
Suppose you buy a bond with a coupon of 7.4 percent today for $1,000. The bond has 14 years to maturity. Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What is the percentage realized rate of return? Assume that interest payments are reinvested at the original YTM. The bond pays coupons twice a year.
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Financial Accounting An Introduction To Concepts Methods And Uses
Authors: Clyde P. Stickney, Roman L. Weil
12th Edition
0324381980, 978-0324381986
