Question: the assumption is updated to after receiving the third interest payment Use the following information to solve the following three questions. You purchased a 6-year
the assumption is updated to after receiving the third interest payment
Use the following information to solve the following three questions. You purchased a 6-year annual-interest coupon bond 3 year ago at the price of $1000. Its coupon rate was 6%, and its par value was $1,000. At the time you purchased the bond, the yield to maturity was 8% and reinvestment rate for the coupon is 10%. If you sell the bond after receiving the third interest payment, 40. how much do you receive from the three coupons and the reinvestments of them? A. $126 B. $180 c. $198.6 D. $218.46 E. None of the above. 41. what is the value of the bond when you sell it? A. $948.46 B. $956.24 C. $964.30 D. $1024.33 E. None of the above. 42. what would be your annual rate of return on holding the bond? A. 2.31% B. 2.92% C. 3.78% D. 4.68% E. None of the above
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