Suppose, you purchased an investment-bond ten years before for Tk.11,200. During the period you receivedincome equal to Tk. 1,250 each year. You just sold the investment for Tk.10,000 . What is your holdingperiod yield that you earned on your Investment?


(2) Manha Corporation's outstanding bond has the following characteristics:Years to Maturity # 12; Coupon rate of Interest -compounded quarterly# 8%; Face Value # Tk.10,000 .
If investors require a rate of return equal to 12 percent on similar -risk bond, what will be the market price ofManha's bond after two year and how much will be the capital gain yield?


(3) Blue Corporation's outstanding bond has the following characteristics:Bond issued for # 15 years; Remaining years to maturity # 8;Coupon rate of Interest -compounded semiannually # 8%; Face Value # Tk.5,000 .If investors require a rate of return equal to 11 percent on similar -risk bond, what would be the market price
of Blue's bond after five year and how much will be the current yield?


(4) Suppose, you purchased a bond five years before for Tk.6,500. During the period you received no interest onthe bond. You just sold the bond for Tk.10,000. What is your holding period yield that you earned on yourInvestment?

Answer rating: 100% (QA)

To calculate the holding period yield on your investment we need to consider the initial investment income received and the final selling price Initial investment Tk 11200 Income received per year Tk ... View the full answer