Meade Corporation bonds mature in 14 years and have a yield to maturity of 7.8 percent. The par value of the bonds is $1,000. The bonds have a 14.4 percent coupon rate and pay interest on a semiannual basis. What are the current yield and capital gains yield on the bonds for this year? (Assume that interest rates do not change over the course of the year.) O CY= 9.65%; CGY = -1.85% O CY= 9.85%; CGY = -2.05% O CY= 9.45%; CGY = -1.65% O CY= 9.25%; CGY = -1.45% O CY= 10.05%; CGY = -2.25%
Meade Corporation bonds mature in 14 years and have a yield to maturity of 7.8 percent. The par value of the bonds is $1,000. The bonds have a 14.4 percent coupon rate and pay interest on a semiannual basis. What are the current yield and capital gains yield on the bonds for this year? (Assume that interest rates do not change over the course of the year.) O CY= 9.65%; CGY = -1.85% O CY= 9.85%; CGY = -2.05% O CY= 9.45%; CGY = -1.65% O CY= 9.25%; CGY = -1.45% O CY= 10.05%; CGY = -2.25%
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:Meade Corporation bonds mature in 14 years and have a yield to maturity of 7.8 percent.
The par value of the bonds is $1,000. The bonds have a 14.4 percent coupon rate and pay
interest on a semiannual basis. What are the current yield and capital gains yield on the
bonds for this year? (Assume that interest rates do not change over the course of the
year.)
CY= 9.65%; CGY = -1.85%
O CY= 9.85%; CGY = -2.05%
O CY= 9.45%; CGY = -1.65%
O CY= 9.25%; CGY = -1.45%
O CY= 10.05% ; CGY = -2.25%
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