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Mary bought a $10,000, 7.25% coupon bond at $9,500. The bond matures in 10 years and interest is paid semi-annually. Three years later, the market rate has dropped and Mary can sell her bond for $10,100. What will her realized yield be if she decides to sell? O 10.50% 5.25% O 4.75% 9.500% QUESTION 23 You buy a bond today for $9,020. The face value of the bond is $10,000, coupon rate is 3.75%, interest is paid semi-annually, and maturity is in 10 years. After holding the bond for 3 years you decide to sell it for $10,200. What is your holding period yield (or total return or realized yield) on this bond? O 9.730% O 4.865% O 4.049% O8.097%

Mary bought a $10,000, 7.25% coupon bond at $9,500. The bond matures in 10 years and interest is paid semi-annually. Three years later, the market rate has dropped and Mary can sell her bond for $10,100. What will her realized yield be if she decides to sell? O 10.50% 5.25% O 4.75% 9.500% QUESTION 23 You buy a bond today for $9,020. The face value of the bond is $10,000, coupon rate is 3.75%, interest is paid semi-annually, and maturity is in 10 years. After holding the bond for 3 years you decide to sell it for $10,200. What is your holding period yield (or total return or realized yield) on this bond? O 9.730% O 4.865% O 4.049% O8.097%

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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Mary bought a $10,000, 7.25% coupon bond at $9,500. The bond matures in 10 years and interest is paid semi-annually. Three years later, the market rate has dropped and Mary can sell her bond for $10,100. What will her realized yield be if she decides to sell? 10.50% 5.25% 4.75% 9.500% QUESTION 23 You buy a bond today for $9,020. The face value of the bond is $10,000, coupon rate is 3.75%, interest is paid semi-annually, and maturity is in 10 years. After holding the bond for 3 years you decide to sell it for $10,200. What is your holding period yield (or total return or realized yield) on this bond? 9.730% 4.865% 4.049% O 8.097% QUESTION 24 Your bank account pays an 8% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT? The periodic rate of interest is 2% and the effective rate of interest is 4%. The periodic rate of interest is 8% and the effective rate of interest is greater than 8%. The periodic rate of interest is 4% and the effective rate of interest is less than 8%. The periodic rate of interest is 2% and the effective rate of interest is greater than
Transcribed Image Text:Mary bought a $10,000, 7.25% coupon bond at $9,500. The bond matures in 10 years and interest is paid semi-annually. Three years later, the market rate has dropped and Mary can sell her bond for $10,100. What will her realized yield be if she decides to sell? 10.50% 5.25% 4.75% 9.500% QUESTION 23 You buy a bond today for $9,020. The face value of the bond is $10,000, coupon rate is 3.75%, interest is paid semi-annually, and maturity is in 10 years. After holding the bond for 3 years you decide to sell it for $10,200. What is your holding period yield (or total return or realized yield) on this bond? 9.730% 4.865% 4.049% O 8.097% QUESTION 24 Your bank account pays an 8% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT? The periodic rate of interest is 2% and the effective rate of interest is 4%. The periodic rate of interest is 8% and the effective rate of interest is greater than 8%. The periodic rate of interest is 4% and the effective rate of interest is less than 8%. The periodic rate of interest is 2% and the effective rate of interest is greater than
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