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You buy a bond with a face value of $5,000 and a bond coupon rate of 3% per quarter. a. What is the amount of
You buy a bond with a face value of $5,000 and a bond coupon rate of 3% per quarter.
a. What is the amount of the quarterly dividend?
b. If you buy the bond now for $4,200 and hold it for five years to redeem it at maturity, what is your effective quarterly rate of return? [Calculate ROR to two decimal places (e.g., 6.78%) by manual interpolation. Show your factor notation and work. The result will be between 4% and 5%.].
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