Question

In March 2015, Daniela Motor Financing (DMF), offered some
securities for sale to the public. Under the terms of the deal, DMF
promised to repay the owner of one of these securities $2,000 in
March 2040, but investors would receive nothing until then.
Investors paid DMF $900 for each of these securities; so they gave
up $900 in March 2015, for the promise of a $2,000 payment 25 years
later.

**a.** Assuming you purchased the bond for $900, what
rate of return would you earn if you held the bond for 25 years
until it matured with a value $2,000? **(Do not round
intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
**

Rate of return %

Bond value $

Rate of return %

Answer #1

In March 2015, Daniela Motor Financing (DMF), offered some
securities for sale to the public. Under the terms of the deal, DMF
promised to repay the owner of one of these securities $2,000 in
March 2040, but investors would receive nothing until then.
Investors paid DMF $740 for each of these securities; so they gave
up $740 in March 2015, for the promise of a $2,000 payment 25 years
later.
a. Assuming you purchased the bond for $740, what...

In March 2015, Daniela Motor Financing (DMF), offered some
securities for sale to the public. Under the terms of the deal, DMF
promised to repay the owner of one of these securities $5,000 in
March 2045, but investors would receive nothing until then.
Investors paid DMF $1,790 for each of these securities; so they
gave up $1,790 in March 2015, for the promise of a $5,000 payment
30 years later.
a. Assuming you purchased the bond for $1,790, what rate...

n March 2015, Daniela Motor Financing (DMF), offered some
securities for sale to the public. Under the terms of the deal, DMF
promised to repay the owner of one of these securities $5,000 in
March 2040, but investors would receive nothing until then.
Investors paid DMF $2,150 for each of these securities; so they
gave up $2,150 in March 2015, for the promise of a $5,000 payment
25 years later. a. Assuming you purchased the bond for $2,150, what
rate...

In March 2012, Daniela Motor Financing (DMF), offered some
securities for sale to the public. Under the terms of the deal, DMF
promised to repay the owner of one of these securities $1,000 in
March 2037, but investors would receive nothing until then.
Investors paid DMF $500 for each of these securities; so they gave
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Assume you purchase a bond that costs $75. a. What is the exact
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Assume you purchase a bond that costs $50. a. What is the exact
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You will earn the YTM on a bond if you hold the bond until
maturity and if interest rates don't change. If you actually sell
the bond before it matures, your realized return is known as the
holding period yield (HPY).
a. Suppose that today you buy a bond with an
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Rust Bucket Motor Credit Corporation (RBMCC), a subsidiary of
Rust Bucket Motor, offered some securities for sale to the public
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Rust Bucket Motor Credit Corporation (RBMCC), a subsidiary of
Rust Bucket Motor, offered some securities for sale to the public
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paid RBMCC $24551 for each of these securities; so they gave up
$24551 on March 28, 2005, for the promise of a $80520 payment in
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