Question

Suppose that you just bought a four-year $1 000 coupon bond with a coupon rate of 6.9% when the market interest rate is 6.9%. One year later, the market interest rate falls to 4.9%.

The rate of return earned on the bond during the year was

**the ans is 12.36%, can yo please show me the formla how
it is arrived at**

Answer #1

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Suppose that you just bought a four-year $1,000 coupon bond with a
coupon rate of 5.4% when the market interest rate is 5.4%. One year
later, the market interest rate falls to 3.4%.
The rate of return earned on the bond during the year was
_%

Suppose that you just bought a four-year $1,000 coupon bond with
a coupon rate of 5.4% when the market interest rate is 5.4%. One
year later, the market interest rate falls to 3.4%.
The rate of return earned on the bond during the year was _%

Suppose that you just bought a four-year $1000 coupon bond
with a coupon rate of 5.7% when the market interest rate is 5.7%.
One year later, the market interest rate falls to 3.7%. The rate
of return earned on the bond during the year was nothing( )%.
(Round your response to two decimal places.)

Suppose that you just bought a four-year $1,000 coupon bond
with a coupon rate of 6.4% when the market interest rate is 6.4%.
One year later, the market interest rate falls to
4.4%. The rate of return earned on the bond during the year was
x %.
(Round your response to two decimal places.)

Suppose that you bought a four year coupon bond with $10,000
face value, 6% coupon rate and 7% yield to maturity. After holding
it for a year and collecting the first coupon payment you decide to
sell it. Calculate the return (in %) on this investment if the
interest rate has just
dropped to 5%.
With Formula's Please

Curtis bought an 8.5% annual coupon bond at par. One year later,
he sold the bond at a quoted price of 98. During the year, market
interest rates rose and inflation was 2.5%. What real rate of
return did Curtis earn on this investment?
a. 6.70% b. 6.50% c. 6.40% d. 3.90% e. 3.40%
ANS: D
Show steps please!

Bond Valuation
C) Suppose that Joan just bought a 15-year bond
for $902.71. The bond has a coupon rate equal to 7 percent, and
interest is paid semiannually. What is the bond’s yield to maturity
(YTM)? If Joan holds the bond for the next three years and its YTM
does not change during that period, what return will she earn each
year? What portion of the annual return represents capital gains
and what portion represents the current yield?
D) Suppose...

You bought a 10-year, 5% coupon bond for $1000, and sold it 1
year later for $1,100. What is the rate of return on your
investment if the bond pays interest annually? Semi-annually?

Question 7
You bought a 10-year, 5% coupon bond for $1,000 and sold it 1
year later for $1,050.
What is the rate of return on your investment if the bond pays
interest annually?
If your marginal tax rate is 35%, and 50% of capital gains are
taxable, what is the after-tax rate of return on your bond
investment?

on the issue date you bought a 20 year maturity 6%
semiannual coupon Bond the bond then sold at YTM of 7% now four
years later the similar Bond sells at YTM of 5% if you hold the
bond now what is your realized rate of return for the 4-year
holding.

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