Question 3 (a) You purchased the bond 45 days after last coupon payment date Quoted price of the bond is $970 Face value of the bond is $1,000 Coupon rate is 5 p a and there are 182 days in the next semi annual coupon period Calculate your holding period percentage return if you sell the bond at $1...

Part a Calculating Holding Period Return Step 1 Calculate accrued interest Daily interest Coupon rat ...

Question 3 (a) You purchased the bond 45 days after last coupon payment date. Quoted price of

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Question 3

(a) You purchased the bond 45 days after last coupon payment date. Quoted price of the bond is $970. Face value of the bond is $1,000. Coupon rate is 5% p.a. and there are 182 days in the next semi-annual coupon period. Calculate your holding period percentage return if you sell the bond at $1,025 immediately after receiving the first coupon payment.
(b) Explain whether coupon rate or current yield is better for measuring performance of bond investors. (3 marks)