Three years ago, Michele purchased four (4) Great Waste Life corporate bonds at a discount of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Three years ago, Michele purchased four (4) Great Waste Life corporate bonds at a discount of $980 each. The face amount on each bond is $1000. The bond had a coupon rate of 3%, payable semi-annually, and is currently maturing. a) What is Michele's holding period return on the bonds? Show your calculations. (3 marks) b) What is her annual rate of return on the bonds? Show your calculations(2 marks) Three years ago, Michele purchased four (4) Great Waste Life corporate bonds at a discount of $980 each. The face amount on each bond is $1000. The bond had a coupon rate of 3%, payable semi-annually, and is currently maturing. a) What is Michele's holding period return on the bonds? Show your calculations. (3 marks) b) What is her annual rate of return on the bonds? Show your calculations(2 marks)
Expert Answer:
Answer rating: 100% (QA)
A Bond investors are not obligated to take an issuers bond and hold it until maturity The return on a bond or asset over the period in which it was he... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The Nair Company issued $500,000 in bonds at a discount five years ago. The current book value of the bond is $475,000. The company now has excess cash on hand and plans to retire the bonds. The...
-
A merchant bought some goods at a discount of 25% of the list price. She wants to mark them at a regular price so that she can give a discount of 20% of the marked price and still make a markup of...
-
Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018, the balance in the Discount on Bonds Payable account is $5,000. This year's balance sheet will...
-
Carey Company is borrowing $200,000 for one year at 12 percent from Second Intrastate Bank. The bank requires a 20 percent compensating balance. What is the effective rate of interest? What would the...
-
Most integrated enterprise systems consolidate enterprise operational databases into a single database. Using what you know about database forms, queries, and reports, explain the advantages of a...
-
An engineer is measuring a quantity q. It is assumed that there is a random error in each measurement, so the engineer will take n measurements and reports the average of the measurements as the...
-
Let \(\mathbf{V}(t)\) be a linearly filtered complex-valued, wide-sense stationary random process with sample functions given by \[ \mathbf{v}(t)=\int_{-\infty}^{\infty} \mathbf{h}(t-\tau)...
-
Sherwood negligently ran into the rear of Austens car, which was stopped at a stoplight. As a result, Austen received bodily injuries and her car was damaged. Sherwood, arts editor for the...
-
Some people feel that a budget is only a guideline, while others believe budgets should be strictly adhered to. What do you think? If you were the GM, what would be your general budget philosophy and...
-
In the spinner problem (see Example 2.1) divide the unit circumference into three arcs of length 1/2, 1/3, and 1/6. Write a program to simulate the spinner experiment 1000 times and print out what...
-
Exactly 0.1374g of pure potassium dichromate was dissolved in 10ml of 2 M sulfuric acid, transferred to a 500.0 ml volumetric flask, and made up to the mark with distilled water. A 25.00 ml aliquot...
-
What is prime movers? Discuss its importance in energy conversion.
-
What are requirements of a good boiler?
-
Explain the principle of working of nuclear power plant.
-
Explain the principle of working of the hydroelectric power plant.
-
Explain the principle of working of a gas power plant.
-
Someone who has a strong inclination to compete, generally has a talent for: Group of answer choices Focused on listening to the other person Winning the negotiation with the best outcome for...
-
10m solution. If Ka(HA) = 10 then pOH of solution will be [Given : log4=0.6] (A) 6.7 (B) Greater than 6.7 & less than 7.0 (C) Greater 7.0 & less than 7.3 (D) Greater than 7.3
-
Jacobs Company has 288,000 shares of common stock authorized, 260,000 shares issued, and 60,000 shares of treasury stock. The companys board of directors declares a dividend of 65 cents per share....
-
On August 4, 2010, Coffman Corporation purchased 3,000 shares of Dittman Company for $150,000. The following information applies to the stock price of Dittman Company: Price 12/31/2010 ... $57...
-
Eddy's Piano Rebuilding Company has been operating for one year (2010). At the start of 2011, its income statement accounts had zero balances and its balance sheet account balances were as follows:...
-
Define and distinguish between an open and a closed adoption.
-
Describe the nature and purpose of putative father registries.
-
Describe the nature and significance of the biologyplus rule.
Study smarter with the SolutionInn App