A bond is issued with a coupon of 5% paid annually, a maturity of 37 years, and a yield to maturity of 8%. What rate of return will be earned by an investor who purchases the bond for $646.74 and holds it for 1 year if the bond's yield to maturity at the end of the year is 9% ? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.
A bond is issued with a coupon of 5% paid annually, a maturity of 37 years, and a yield to maturity of 8%. What rate of return will be earned by an investor who purchases the bond for $646.74 and holds it for 1 year if the bond's yield to maturity at the end of the year is 9% ? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.
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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Transcribed Image Text:A bond is issued with a coupon of 5% paid annually, a maturity of 37 years, and a yield to maturity of 8%. What rate of return
will be earned by an investor who purchases the bond for $646.74 and holds it for 1 year if the bond's yield to maturity at the
end of the year is 9% ? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal
places. Negative amount should be indicated by a minus sign.
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