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 Usethe 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

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!