A- You bought a bond five years ago for $779 per bond. The bond is now selling
Question:
A- You bought a bond five years ago for $779 per bond. The bond is now selling for $760. It also paid $50 in interest per year, which you reinvested in the bond. Calculate the realized rate of return earned on this bond. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
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B- You have just been offered a bond for $863.90. The coupon rate is 7 percent payable annually, and the yield to maturity on new issues with the same degree of risk are 9 percent. You want to know how many more interest payments you will receive, but the party selling the bond cannot remember. If the par value is $1,000, how many interest payments remain? (Do not round intermediate calculations. Round your answer to the nearest whole number.)
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Financial Markets and Institutions
ISBN: 978-0077861667
6th edition
Authors: Anthony Saunders, Marcia Cornett