Question: please help! A $ 1 , 0 0 0 par value bond was issued 3 0 years ago at a 1 2 percent coupon rate.
please help!
A $ par value bond was issued years ago at a percent coupon rate. It currently has years remaining to
maturity. Interest rates on similar obligations are now percent. Assume Ms Bright bought the bond three years ago when
it had a price of $ Further assume Ms Bright paid percent of the purchase price in cash and borrowed the rest
known as buying on margin She used the interest payments from the bond to cover the interest costs on the loan.
a What is the current price of the bond? Use Table
Note: Input your answer to decimal places.
Price of the bond
b What is her dollar profit based on the bond's current price?
Note: Do not round interm ediate calculations and round your answer to decimal places.
Dollar profit
c How much of the purchase price of $ did Ms Bright pay in cash? Round your answer two decimal places.
d What is Ms Bright's percentage return on her cash investment? Divide the answer to part b by the answer to part c Round your answer two decimal places.
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