1. A bond has a $1,000 par value, 12 years to maturity, and an 8% coupon rate (annual coupon payment). You purchased the bond today for $980. a. What is its yield to maturity? b. You plan to sell the bond after three years, and the required rate of return at that time will be 10%. What is your holding period return?
1. A bond has a $1,000 par value, 12 years to maturity, and an 8% coupon rate (annual coupon payment). You purchased the bond today for $980. a. What is its yield to maturity? b. You plan to sell the bond after three years, and the required rate of return at that time will be 10%. What is your holding period return?
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
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1. A bond has a $1,000 par value, 12 years to maturity, and an 8% coupon rate (annual coupon payment). You purchased the bond today for $980. a. What is its yield to maturity? b. You plan to sell the bond after three years, and the required
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