Suppose I buy a bond with a face value of $1000, thirty years to maturity, 8% coupon

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Suppose I buy a bond with a face value of $1000, thirty years to maturity, 8% coupon rate (annual coupons) at par. I hold the bond for one year and sell it immediately after the first coupon is paid out. At that time, the yield to maturity is 7%.

a. What is the bond's market value when I sell it?

b. What is my total holding period return?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0132148238

2nd edition

Authors: Berk, DeMarzo, Harford

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Posted Date: Apr 25, 2024 06:48 AM

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Suppose I buy a bond with a face value of $1000, thirty years to maturity, 8% coupon

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a Bonds Market Value When Sold Since you bought the bond at par value 1000 and sold it after receivi... View the full answer

Fundamentals of Corporate Finance

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