If you purchase a $1,000 face value, 4% annual coupon bond with 6 years to maturity when
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Question:
If you purchase a $1,000 face value, 4% annual coupon bond with 6 years to maturity when the going interest rate (or yield) is 3%, then you would pay $1,054.17 for the bond. What is your expected rate of return on the bond assuming interest rates do not change and you sell the bond one year later?
Enter your answer as a percentage rounded to two decimals.
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