One year ago you bought a 5-year 5% coupon bond that will pay $1,000 at maturity...

  

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One year ago you bought a 5-year 5% coupon bond that will pay $1,000 at maturity (its par value). The bond was priced at $810.46 to yield 10% and pays interest annually at the end of each year. Now, one year later, (after the first interest payment), the bond is priced to yield 9%. What is the new price if you decide to sell now? (5 points) What was your holding period return for the one year? (5 points) One year ago you bought a 5-year 5% coupon bond that will pay $1,000 at maturity (its par value). The bond was priced at $810.46 to yield 10% and pays interest annually at the end of each year. Now, one year later, (after the first interest payment), the bond is priced to yield 9%. What is the new price if you decide to sell now? (5 points) What was your holding period return for the one year? (5 points)

Answer rating: 100% (QA)

Heres how to find the new price and your holding period return for the bond New Price We can use a b... View the full answer