Question

Last year Janet purchased a $1,000 face value corporate bond with an 12% annual coupon rate and a 25-year maturity. At the time of the purchase, it had an expected yield to maturity of 10.2%. If Janet sold the bond today for $1,140.91, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places.

Answer #1

Last Year:

Face Value = $1,000

Annual Coupon Rate = 12%

Annual Coupon = 12% * $1,000

Annual Coupon = $120

Time to Maturity = 25 years

Annual YTM = 10.20%

Purchase Price = $120 * PVIFA(10.20%, 25) + $1,000 *
PVIF(10.20%, 25)

Purchase Price = $120 * (1 - (1/1.102)^25) / 0.102 + $1,000 /
1.102^25

Purchase Price = $1,160.91

Selling Price = $1,140.91

Rate of Return earned = (Selling Price + Coupon received -
Purchase Price) / Purchase Price

Rate of Return earned = ($1,140.91 + $120 - $1,160.91) /
$1,160.91

Rate of Return earned = 8.61%

So, Janet earned a rate of return of 8.61% last year.

Last year Janet purchased a $1,000 face value corporate bond
with an 12% annual coupon rate and a 10-year maturity. At the time
of the purchase, it had an expected yield to maturity of 8.43%. If
Janet sold the bond today for $1,167.49, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.

Last year Janet purchased a $1,000 face value corporate bond
with an 7% annual coupon rate and a 25-year maturity. At the time
of the purchase, it had an expected yield to maturity of 12.54%. If
Janet sold the bond today for $1,091.2, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.

Last year Janet purchased a $1,000 face value corporate bond
with an 10% annual coupon rate and a 25-year maturity. At the time
of the purchase, it had an expected yield to maturity of 11.27%. If
Janet sold the bond today for $927.53, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.
______ %

Last year Janet purchased a $1,000 face value corporate bond
with an 10% annual coupon rate and a 15-year maturity. At the time
of the purchase, it had an expected yield to maturity of 7.95%. If
Janet sold the bond today for $1,104.19, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.

Last year Janet purchased a $1,000 face value corporate bond
with a 7% annual coupon rate and a 20-year maturity. At the time of
the purchase, it had an expected yield to maturity of 6.89%. If
Janet sold the bond today for $1,100.22, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.
%

Last year Janet purchased a $1,000 face value corporate bond
with a 10% annual coupon rate and a 20-year maturity. At the time
of the purchase, it had an expected yield to maturity of 9.26%. If
Janet sold the bond today for $1,008.42, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.

Last year Janet purchased a $1,000 face value corporate bond
with an 7% annual coupon rate and a 10-year maturity. At the time
of the purchase, it had an expected yield to maturity of 12.5%. If
Janet sold the bond today for $1,137.79, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.
________%

Last year Janet purchased a $1,000 face value corporate bond
with an 10% annual coupon rate and a 10-year maturity. At the time
of the purchase, it had an expected yield to maturity of 12.45%. If
Janet sold the bond today for $982.47, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.

Last year Janet purchased a $1,000 face value corporate bond
with a 10% annual coupon rate and a 10-year maturity. At the time
of the purchase, it had an expected yield to maturity of 9.85%. If
Janet sold the bond today for $941.57, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.
%

Last year Janet purchased a $1,000 face value corporate bond
with an 11% annual coupon rate and a 15-year maturity. At the time
of the purchase, it had an expected yield to maturity of 11.72%. If
Janet sold the bond today for $1,119.27, what rate of return would
she have earned for the past year? Do not round intermediate
calculations. Round your answer to two decimal places.
%

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 7 minutes ago

asked 14 minutes ago

asked 20 minutes ago

asked 23 minutes ago

asked 24 minutes ago

asked 26 minutes ago

asked 31 minutes ago

asked 39 minutes ago

asked 39 minutes ago

asked 40 minutes ago

asked 50 minutes ago

asked 50 minutes ago