Question: If its possible explain how to do it with a ba ll plus. thanks!! Holding Period Yield [LO2] The YTM on a bond is the

If its possible explain how to do it with a ba ll plus. thanks!!

Holding Period Yield [LO2] The YTM on a bond is the interest rate you earno your investment if interest rates don't change. If you actually sell the bond before matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy a bond with an annual coupon rate of 7 percent $1,050. The bond has 17 years to maturity. What rate of return do you expect earn on your investment? Assume a par value of $1,000. b. Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. What price will your bond sell for? What is the HPY on your invest ment? Compare this yield to the YTM when you first bought the bond. Why ar they different

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