Question: Need help with the steps; cannot use excel Last year, you purchased a $1,000 par value bond with a 7.5% annual coupon and a 20-year
Need help with the steps; cannot use excel
Last year, you purchased a $1,000 par value bond with a 7.5% annual coupon and a 20-year maturity. At the time of the purchase, it had an expected YTM of 8%. After receiving the coupon, you sold the bond today for $930. What is your return rate in one year? What is your return rate in one year? (Hint: find out how much did you pay for the bond last year?) Select one: a. 18.28% b. -2.11% c. 6.64% d. 5.68% e. 2.75%
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