Suppose I buy a bond with a face value of $1000, thirty years to maturity, 8% coupon
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Question:
Suppose I buy a bond with a face value of $1000, thirty years to maturity, 8% coupon rate (annual coupons) at par. I hold the bond for one year and sell it immediately after the first coupon is paid out. At that time, the yield to maturity is 7%.
a. What is the bond's market value when I sell it?
b. What is my total holding period return?
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