ou just bought a zero-coupon bond for $155. The bond matures in 9 years and the YTM is 5%. What will be your rate of return per year if you sell the bond 2 years later? Assume that the YTM has not changed. Please enter your answer as % and round to 2 decimal places. (e.g. RET=0.02673 should be entered as 2.67%).

ou just bought a zero-coupon bond for $155. The bond matures in 9 years and the YTM is 5%. What will be your rate of return per year if you sell the bond 2 years later? Assume that the YTM has not changed. Please enter your answer as % and round to 2 decimal places. (e.g. RET=0.02673 should be entered as 2.67%).

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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Similar questions

Suppose that you just bought a four-year $1,000 coupon bond with a coupon rate of 6.5% when the market interest rate is 6.5%. You sell the bond one year later after the market interest rate falls to 4.5%. The rate of return earned on the bond during the year was %. (Round your response to two decimal places.)
Assume you have some money and want to save to amass a given amount at the end of 5 years. One of the options you have is a 5-year, 10% coupon bond that is currently selling at par. Assume that bond is default free. What will determine the total amount of money you will have at the end of year 5 if you buy the bond today?
You buy an 8.6% coupon, paid annually, 5-year maturity bond for $960. A year later, the bond price is $1,070. Face value of the bond is $1,000. a. What is the yield to maturity on the bond today? (Round your answer to 2 decimal places.) % b. What is the yield to maturity on the bond in one year? ( Round your answer to 2 decimal places.) c. What is your rate of return over the year? (Round your answer to 2 decimal places.)
Suppose that you just bought a four-year $1,000 coupon bond with a coupon rate of 5.7% when the market interest rate is 5.7%. You sell the bond one year later after the market interest rate falls to 3.7%. The rate of return earned on the bond during the year was %. (Round your response to two decimal places.)
You hold a 14 year bond that is callable in 4 years. The call premium is one semi-annual coupon payment, and the coupon rate is0.14. The current YTM is 0.04. What is the yield to call? Group of answer choices -0.0675 -0.0615 -0.0635 -0.0588 -0.0654
If you purchased a bond one year ago for $1000 and just sold it for $1100 after receiving the $50 annual coupon payment, then what was your real return on the investment if theinflation rate was 2.1% for the same year?
You invest in a 10-year Peloton bond that pays interest of 8.7% per year. If inflation is 6.1% per year, what is: The exact, real interest rate (Your answer should be a % carried to 3 places), and The approximate real interest rate? (Your answer should be a % carried to 1 place)
You invest in a 4-years to maturity, 5% coupon bond, 10% yield-to-maturity, semi- annual coupon bond. You hold this bond until maturity. If you receive the coupons but do not reinvest them, what is your total annualized holding period return?
Phil bought Bond A one year ago for $1,000. Currently the bond sells for $1,210 and has 10 years remaining to maturity with a 9% coupon rate. What do you know about Phil's bond rate of return over the past year compared to the YTM today? O Phil's rate of return YTMI
Help me please
You purchased a bond for 725. The bond has a coupon rate of 8 percent, which is paid semiannually. It matures in 6 years and has a par value of 1,000. What is your expected rate of return?
You purchased a zero-coupon bond one year ago for $277.33. The market interest rate is now 8 percent. Assume semiannual compounding. If the bond had 17 years to maturity when you originally purchased it, what was your total return for the past year? Assume a par value of $1,000. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Total return for the past year %

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