Question: A $ 1 , 0 0 0 par value bond was issued 3 0 years ago at a 1 2 percent coupon rate. It currently
A $ par value bond was issued years ago at a percent coupon rate. It currently has years remaining to maturity. Interest rates on similar obligations are now percent. Assume Ms Bright bought the bond three years ago when it had a price of $ Further assume Ms Bright paid percent of the purchase price in cash and borrowed the rest known as buying on margin She used the interest payments from the bond to cover the interest costs on the loan.
a What is the current price of the bond? Use Table Input your answer to decimal places.
b What is her dollar profit based on the bonds current price? Do not round intermediate calculations and round your answer to decimal places.
c How much of the purchase price of $ did Ms Bright pay in cash? Do not round intermediate calculations and round your answer to decimal places.
d What is Ms Brights percentage return on her cash investment? Divide the answer to part b by the answer to part cDo not round intermediate calculations. Input your answer as a percent rounded to decimal places.
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