Hi,

I have a question regarding a problem :

On March 2^nd, 2015, the Egyptian government issued a 15-year, 10% semi-annual, fixed rate coupon bond, at a $1,000 par value.

Two years after the issue (March 2^nd, 2017), UK-based hedge fund Marble Arch Partners (MAP) purchased 5,000 units of these bonds at a price of 85% of par. MAP financed 70% of this purchase with a 1-year renewable bank loan at a 4% interest. The remaining 30% of the purchase was financed with HP equity.

One year later (March 2^nd, 2018), MAP sold all its Egyptian bonds at 90% of par, after having received the coupon payment.

Please answer the following questions (Ignore taxes; show the details of your calculations):

• What was the yield to maturity of the bonds on the date that MAP purchased them?
• What was MAP's net profit (or loss) per bond in dollars on this trade after selling the bonds in 2018? What is MAP's total profit on this trade?
• What was MAP' ROA on this deal?
• What was MAP' ROE on this deal?