You purchased an annual interest coupon bond one year ago with 6 years remaining to maturity at
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Question:
You purchased an annual interest coupon bond one year ago with 6 years remaining to maturity at the time of purchase. The coupon rate is 10% and face value is $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first coupon payment and the bond's yield to maturity had changed to 7%, your annual total rate of return on holding the bond for that year would have been:
a. 7.00%
b. 7.82%
c. 8.00%
d. 11.95%
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Posted Date: