Question: I just need help with part C. Please show all work, thank you The YTM on a bond is the interest rate you earn on
I just need help with part C.
Please show all work, thank you
The YTM on a bond is the interest rate you earn on your investment if interest rates dont change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY).
a. Suppose that today you buy an annual coupon bond with a coupon rate of 8.3 percent for $835. The bond has 9 years to maturity and a par value of $1,000. What rate of return do you expect to earn on your investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
A. Answer: 11.373% Rate of Return
B. Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. b. What price will your bond sell for? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
B. Answer: Price 896.14
C. $ What is the HPY on your investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
***C.Holding period yield _____%?
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