An engineer bought a $1000 bond of an American airline for $875 just after an interest payment had been made. The bond paid a 6% coupon interest rate semiannually. What nominal rate of return did the engineer receive from the bond if he held it 13.5 years until its maturity?

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
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can anyone please help me with this question without using excel thanks

An engineer bought a $1000 bond of an American
airline for $875 just after an interest payment had
been made. The bond paid a 6% coupon interest rate
semiannually. What nominal rate of return did the
engineer receive from the bond if he held it 13.5
years until its maturity?
Transcribed Image Text:An engineer bought a $1000 bond of an American airline for $875 just after an interest payment had been made. The bond paid a 6% coupon interest rate semiannually. What nominal rate of return did the engineer receive from the bond if he held it 13.5 years until its maturity?
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