Question

You purchased a bond for $ 1,100. The bond has a coupon rate of 8 ​percent,...

You purchased a bond for $ 1,100. The bond has a coupon rate of 8 ​percent, which is paid semiannually. It matures in 7 years and has a par value of $1,000. What is your expected rate of​ return?

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Answer #1

Expected rate of return per year= 6.216390% Calculated using RATE function of Excel as follows:

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