Question
You invest in a 5-year bond (par=$1,000) with a coupon rate of 6%. The interest is paid annually, and its YTM is 4%. If you
You invest in a 5-year bond (par=$1,000) with a coupon rate of 6%. The interest is paid annually, and its YTM is 4%. If you sell the bond one year later, what is your holding period return?
| A. | 4.0% | |
| B. | 4.5% | |
| C. | 5.1% | |
| D. | 7.6% |
You are evaluating a corporate bond issued by National Fishing League (NFL). The NFL bond is a 4-year bond with a par value of $1 million. Its interest (coupon) payments are based on the following schedule: $50,000 in year 1, $60,000 in year 2, $70,000 in year 3, and $80,000 in year 4. You estimate NFLs current interest rate is 6%. What is the price of the bond (in $MM)?
| A. | $1.0149 | |
| B. | $0.9893 | |
| C. | $1.0381 | |
| D. | $0.9965 |
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Cost Accounting A Managerial Emphasis
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
6th Canadian edition
978-0133392883
