Question

4. Two years ago, you purchased a zero coupon bond with a 5-year time to maturity, a 6% YTM, and a par value of $1,000. The bond’s YTM today is 5%. If you sell the bond today, what is the annual rate of return on your investment? v

Answer #1

Please refer to the image.

If you have any doubt, ask me in the comment section please.

4. Two years ago, you purchased a zero coupon bond with a 5-year
time to maturity, a 6% YTM, and a par value of $1,000. The bond’s
YTM today is 5%. If you sell the bond today, what is the annual
rate of return on your investment?

Two years ago an investor purchased a 4% semi-annual compounding
coupon bond with a remaining maturity of 20 years at a price of (at
that time) 90% of par. Today, i.e. two years after the purchase,
the investor realizes that the bond has exactly the same price like
it had two years ago (i.e. 90%). Based on this information, which
of the following answers is correct:
a) The YTM of the 4% Bond today is the higher than two years...

You purchased a 5-year annual-interest coupon bond 1 year ago.
Its coupon interest rate was 6%, and its par value was $1,000. At
the time you purchased the bond, the yield to maturity was 4%. If
you sold the bond after receiving the first interest payment and
the bond's yield to maturity had changed to 3%, your annual total
rate of return on holding the bond for that year would have been
approximately _________.
0.6%
8.9%
5%
5.5%

Consider the following semi-annual coupon bond: $1,000 par
value; 5 years until maturity; 7% coupon rate; YTM of 6%. Calculate
the bond’s price today. NOTE: This is a coupon bond.
Please show all work

Suppose you purchase a 30-year, SEK 10,000 par value,
zero-coupon bond with a yield to maturity (YTM) of 4.4%. You hold
the bond for 9 years before selling it.
(a) What is the price of the bond when you buy it?
Answer: The price of the bond is SEK .
(round to full SEK)
(b) If the bond’s yield to maturity drops by 1% when you sell it,
what is the internal rate of return of your investment?
Answer: If...

You have just purchased a 11-year zero-coupon bond with a yield
to maturity of 9% and a par value of $1,000. What would your rate
of return at the end of the year be if you sell the bond? Assume
the yield to maturity on the bond is 10% at the time you sell.

Five years ago, Rock Steady Corp issued a semiannual coupon bond
with seven years until maturity. This bond was originally issued at
par with a $1,000 face value. The coupon rate on the bond is 8%.
Today, the yield-to-maturity (YTM) is 10%. Assume an investor
bought the bond at the time it was issued and sold it today. What
is the holding period return for the five year period of
investment? Please provide the formula you used, and show your...

Five years ago, Rock Steady Corp issued a semiannual coupon bond
with seven years until maturity. This bond was originally issued at
par with a $1,000 face value.
The coupon rate on the bond is 8%. Today, the yield-to-maturity
(YTM) is 10%.
Assume an investor bought the bond at the time it was issued and
sold it today. What is the holding period return for the five year
period of investment?
0.3389
0.3422
0.3654
0.3838

Five years ago, Rock Steady Corp issued a semiannual coupon bond
with seven years until maturity. This bond was originally issued at
par with a $1,000 face value.
The coupon rate on the bond is 8%. Today, the yield-to-maturity
(YTM) is 10%.
Assume an investor bought the bond at the time it was issued and
sold it today. What is the holding period return for the five year
period of investment? please provide step by step solution!

You purchased an annual interest coupon bond one year ago that
had six years remaining to maturity at that time. The coupon
interest rate was 10% and the par value was $1,000. At the time you
purchased the bond, the yield to maturity was 8%. If you sold the
bond after receiving the first interest payment and the yield to
maturity continued to be 8%, your annual total rate of return on
holding the bond for that year would have...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 5 minutes ago

asked 5 minutes ago

asked 1 month ago

asked 2 months ago

asked 4 months ago

asked 3 weeks ago

asked 3 weeks ago

asked 3 weeks ago

asked 3 weeks ago

asked 3 weeks ago

asked 4 months ago

asked 2 months ago