Problem 7-21 Bond Prices and Interest Rate Changes (LG7-5) A 6.80 percent coupon bond with 21 years left to maturity is priced to offer a 5.3 percent yield to maturity. You believe that in one year, the yield to maturity will be 5.8 percent. (Assume interest payments are semiannual.) What would be the total return of the bond in dollars? What would be the total return of the bond in percent? Note: Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places. Answer is complete but not entirely correct. $ (3.14) (0.26) % Total return in dollars Total return in percentage
Problem 7-21 Bond Prices and Interest Rate Changes (LG7-5) A 6.80 percent coupon bond with 21 years left to maturity is priced to offer a 5.3 percent yield to maturity. You believe that in one year, the yield to maturity will be 5.8 percent. (Assume interest payments are semiannual.) What would be the total return of the bond in dollars? What would be the total return of the bond in percent? Note: Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places. Answer is complete but not entirely correct. $ (3.14) (0.26) % Total return in dollars Total return in percentage
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 13PROB
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