Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You buy an eleven-year bond that has a 8.25% current yield and a 8.25% coupon (paid annually). In one year, promised yields to maturity have

You buy an eleven-year bond that has a 8.25% current yield and a 8.25% coupon (paid annually). In one year, promised yields to maturity have risen to 9.25%. What is your holding-period return? homework explanation says:Using a financial calculator, FV = 1,000, n = 10, PMT = 82.50, and i = 9.25 gives us a selling price of $936.52 this year. but when I plugged it in the calculator i get 984.96? please help explain why I'm getting wrong answer in financial calc. answer is 1.9%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik

10th edition

0-07-794127-6, 978-0-07-79412, 978-0077431808

Students also viewed these Finance questions