Owen purchases a 20-year, $1,000 bond with a coupon rate of 8 percent paid annually with a margin requirement of 40 percent. What would be his rate of return if the interest rates decreased, immediately after purchase, to 7.5 percent? What would be his rate of return if the interest rates increased, immediately after purchase, to 8.8 percent?

Answer rating: 100% (QA)

To calculate Owens rate of return we need to consider the bonds coupon payments and the bonds value ... View the full answer