A five-year corporate bond with an annual 6% coupon has a 2% spread over a similar maturity Treasury. You purchase it and sell after one year, at which time its spread has widened by a half percent. Assume the relevant Treasury bond's yield is 4% on the investment date and the horizon date. 

What is your ROR?

Answer rating: 100% (QA)

ANSWER To calculate the ROR Rate of Return of the corporate bond we need to consider the following components The price paid for the bond The coupon p... View the full answer