Question

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.)

Answer #1

Rate of return was 11.28%

**Explanation:**

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.)

(Bond valuation) At the beginning of the year, you bought a
$1000 par value corporate bond with an annual coupon rate of 16
percent and a maturity date of 15 years. When you bought the bond,
it had an expected yield to maturity of 8 percent. Today the bond
sells for $1970.
a. What did you pay for the bond?
b. If you sold the bond at the end of the year, what would be
your one-period return on the...

At the beginning of the? year, you bought a ?$1000 par value
corporate bond with an annual coupon rate of 13 percent and a
maturity date of 12 years. When you bought the? bond, it had an
expected yield to maturity of 12 percent. Today the bond sells for
?$1200.
a. What did you pay for the? bond?
b. If you sold the bond at the end of the? year, what would be
your? one-period return on the? investment? Assume...

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!

A. You buy a 10-year US Treasury Bond with a coupon interest
rate of 5% and Face Value of $1,000. You decide to sell your bond
four years later when market interest rates have fallen to 4%. Find
the selling price of the bond.
B. Calculate the Annualized Holding Period Return on the
investment. Show your work.

Suppose you bought a 8 percent coupon bond one year ago for
$1,050. The bond sells for $1,115 today.
Requirement 1: Assuming a $1,000 face value, what was your total
dollar return on this investment over the past year?
Requirement 2: What was your total rate of return on this
investment over the past year (in percent)?
Requirement 3: If the inflation rate last year was 5 percent,
what was your total "real" rate of return on this investment?
Assume...

1) Suppose a ten-year, $1000 bond with an 8.2% coupon rate and
semiannual coupons is trading for %1,035.49.
a. What is the bond's yield to maturity (expressed as an APR
with semiannual compounding)?
b. If the bond's yield to maturity changes to 9.9% APR, what
will be the bond's price?
2) Suppose a seven-year, $1,000 bond with an 8.2% coupon rate
and semiannual coupons is trading with a yield to maturity of
6.63%.
a. If the yield to maturity of...

Suppose that you invest in a two-year Treasury bond with a
coupon rate of 7% and $1,000 par. Suppose that you buy this bond at
a price of exactly $1,000. You intend to hold this bond to maturity
and reinvest the coupons until the bond matures. You expect to
reinvest the coupons in an account that pays an APR of 1.26%, with
semi-annual compounding. What is the effective annual rate of
return on your investment? Hint: see Example 8 in...

You bought a 29.0-year, 8.10% semi-annual coupon bond today and the
current market rate of return is 7.60%. The bond is callable in 7.0
years with a $87.00 call premium. What price did you pay for your
bond?

You bought a 29.0-year, 8.10% semi-annual coupon bond today and the
current market rate of return is 7.60%. The bond is callable in 7.0
years with an $87.00 call premium. What price did you pay for your
bond?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 7 seconds ago

asked 8 seconds ago

asked 2 minutes ago

asked 3 minutes ago

asked 5 minutes ago

asked 5 minutes ago

asked 5 minutes ago

asked 5 minutes ago

asked 5 minutes ago

asked 8 minutes ago

asked 8 minutes ago

asked 9 minutes ago