(Bond valuation) At the beginning of the year, you bought a $1,000 par value corporate bond...

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(Bond valuation) At the beginning of the year, you bought a $1,000 par value corporate bond with an annual coupon rate of 15 percent and a maturity date of 18 years. When you bought the bond, it had an expected yield to maturity of 8 percent. Today the bond sells for $1,970. a. What did you pay for the bond? b. If you sold the bond at the end of the year, what would be your one-period return on the investment? Assume that you did not receive any interest payment during the holding period. The price you paid for the bond is $(Round to the nearest cont (Bond valuation) At the beginning of the year, you bought a $1,000 par value corporate bond with an annual coupon rate of 15 percent and a maturity date of 18 years. When you bought the bond, it had an expected yield to maturity of 8 percent. Today the bond sells for $1,970. a. What did you pay for the bond? b. If you sold the bond at the end of the year, what would be your one-period return on the investment? Assume that you did not receive any interest payment during the holding period. The price you paid for the bond is $(Round to the nearest cont

Answer rating: 100% (QA)

a Calculate how much you paid for the bond at the beginning of the year using the present value form... View the full answer