los owns investment A and 1 bond B. The total value of his holdings is $2,496.36. Investment A is expected to pay annual cash flows to Ronish of $291.00 per year with the first annual cash flow expected later today and the last annual cash flow expected in years from today. Investment A has an expected return 15.55 percent. Bond B pays semi-annual coupons, matures in 13 years a face value of $1,000.00, has a coupon rate of 8.52 percent, and pays its next coupon in 6 months. What is the yield-to-maturity f bond B? O 4.78% (plus or minus 2 bps) O 3.47% (plus or minus 2 bps) O 9.57% (plus or minus 2 bps) O 5.32% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer
los owns investment A and 1 bond B. The total value of his holdings is $2,496.36. Investment A is expected to pay annual cash flows to Ronish of $291.00 per year with the first annual cash flow expected later today and the last annual cash flow expected in years from today. Investment A has an expected return 15.55 percent. Bond B pays semi-annual coupons, matures in 13 years a face value of $1,000.00, has a coupon rate of 8.52 percent, and pays its next coupon in 6 months. What is the yield-to-maturity f bond B? O 4.78% (plus or minus 2 bps) O 3.47% (plus or minus 2 bps) O 9.57% (plus or minus 2 bps) O 5.32% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer
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:Carlos owns investment A and 1 bond B. The total value of his holdings is $2,496.36. Investment A is expected to pay annual cash
flows to Ronish of $291.00 per year with the first annual cash flow expected later today and the last annual cash flow expected in 8
years from today. Investment A has an expected return of 15.55 percent. Bond B pays semi-annual coupons, matures in 13 years, has
a face value of $1,000.00, has a coupon rate of 8.52 percent, and pays its next coupon in 6 months. What is the yield-to-maturity for
bond B?
4.78% (plus or minus 2 bps)
3.47% (plus or minus 2 bps)
9.57% (plus or minus 2 bps)
5.32% (plus or minus 2 bps)
none of the answers are within 2 bps of the correct answer
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