Question
Last year Janet purchased a $1,000 face value corporate bond with a 10% annual coupon rate...
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.
Homework Answers
Answer #1
Purchase price is calculated at $ 1,066.32 using PV function of Excel
Rate of return over one year= 3.95%
Calculation as follows:
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