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. If Janet sold the bond today for $986.11, what rate of return would she have earned for the past vear? Do not round intermediate calculations. Round your answer to two decimal

. If Janet sold the bond today for $986.11, what rate of return would she have earned for the past vear? Do not round intermediate calculations. Round your answer to two decimal

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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answer both components PLEASE!

еВook Last year Janet purchased a $1,000 face value corporate bond with an 8% annual coupon rate and a 20-year maturity. At the time of the purchase, it had an expected yield to maturity of 11.1%. If Janet sold the bond today for $986.11, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places.
Transcribed Image Text:еВook Last year Janet purchased a $1,000 face value corporate bond with an 8% annual coupon rate and a 20-year maturity. At the time of the purchase, it had an expected yield to maturity of 11.1%. If Janet sold the bond today for $986.11, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places.
Expert Solution
Step 1

Information provided:

Face Value = $1000

Annual coupon = 8% = $80

Yield to maturity (YTM) = 11.1%

Time = 20 years

 

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