Question
You just bought a zero-coupon bond for $156. The face value is $1,000, and the maturity is 20 years. Compute the ANNUAL rate of return
You just bought a zero-coupon bond for $156. The face value is $1,000, and the maturity is 20 years. Compute the ANNUAL rate of return of your investment if you sell the bond in exactly 5 years. Assume that the YTM in 5 years will be 9%. Please enter your answer as %. For example, if your answer is 2.34%, please enter 2.34. Round to two decimal places.
You deposit $1,000 at the bank. 9 years later the bank pays you back $1,423. What was the ANNUAL rate of return (interest rate) on your deposit? Please enter your answer as %. For example, if your answer is 2.34%, please enter 2.34. Round to two decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started