What is the rate of return for an investor who pays $963.88 for a three-year bond with an 8.2% coupon paid annually and a face value of $1,000 and sells the bond one year later for $1,016.667?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
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Financial Accounting Question please solve this one

What is the rate of return for an investor who pays
$963.88 for a three-year bond with an 8.2% coupon
paid annually and a face value of $1,000 and sells the
bond one year later for $1,016.667?
Transcribed Image Text:What is the rate of return for an investor who pays $963.88 for a three-year bond with an 8.2% coupon paid annually and a face value of $1,000 and sells the bond one year later for $1,016.667?
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