Question

The market price is ​$975 for a 14​-year bond ​($1000 par​ value) that pays 9 percent...

The market price is ​$975 for a 14​-year bond ​($1000 par​ value) that pays 9 percent interest ​(4.5 percent​ semiannually). What is the​ bond's expected rate of​ return? The​ bond's expected annual rate of return is?

Homework Answers

Answer #1

Bond's Expected semi annual rate of return = 4.66%

Bond's Expected annual rate of return = 2 * Bond's Expected semi annual rate of return

Bond's Expected annual rate of return = 9.32%

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