Question
You buy an 8% coupon paid annually, 10-year maturity bond when its annual yield to maturity is 9.9%. A year later you sell the bond
You buy an 8% coupon paid annually, 10-year maturity bond when its annual yield to maturity is 9.9%. A year later you sell the bond when the annual yield to maturity is 19%. What is return over the one year you held the bond?
Please show formula as well
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Heres how to calculate your return on the bond over the one year you held it considering both coupon ...
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Step: 2
Step: 3
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Corporate Finance
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
3rd Edition
0077173635, 9780077173630
