Question: Consider a 1 5 year 1 0 % coupon bond with a par value of 1 0 0 0 and semi annual coupon payments. The
Consider a year coupon bond with a par value of and semi annual coupon payments. The bonds current price is The YTM of the bond is USE CALCUALTOR to solve Just show what value you put in
Assuming an investor bought the bond at and has an income tax rate of and a capital gain tax rate of What is the investors aftertax YTM
B Another investor Bob bought the bond for and plan to sell the bond in years. Jim put the bond in his retirement account so he doesnt need to worry about any tax consequence of this investment. He assumes that he can reinvest the coupon sat a rate of & What is his horizon yield during his investment horizon? Assuming the market discount rate at the end of his investment horizon is
C Right after Jim bought the bond the market interest rate unexpectedly eent up to and is expected to stay at this level until the bond matures. At this new reinvestment rate, what is his interest on interest income at the end of his investment horizon?
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