Question: Please answer question step by step The YTM on a bond is the interest rate you earn on your investment if interest rates don't change.
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The YTM on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). Suppose that two years ago, you bought a bond with an annual coupon rate of 7 percent, priced at $1,160 with 15 years to maturity, and $1000 par value. Since then the YTM of the bond has declined by 1 percent, and you decide to sell. What price will your bond sell for now? What is the HPY on this investment? $1,354;10.2%$1,254;10.5%$1,251;9.8%$1,233;11.2%
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