Question: Please answer both questions and provide excel steps/ equations. Thank You 1. You purchase a $1,000 face value bond that is paying a coupon rate
Please answer both questions and provide excel steps/ equations. Thank You
1. You purchase a $1,000 face value bond that is paying a coupon rate of 10% per year 2. Consider the return behavior of the following two stocks: semiannually when the market interest rate is only 4% per half-year. The bond has three years until maturity. You hold it for six months when the next coupon is paid and then sell it (immediately after receiving the coupon payment). When you sell it, the market interest rate is still 4% per half-year. What's your HPY? (a) Calculate the expected return on each stock. (b) Calculate the standard deviation of the return on each stock
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