wo years ago, Bob purchased a 20-year $1,000 par value zero-coupon bond for $311.80. If today (with 18 ears to maturity) the bond is priced to yield 5.15%, what is his annualized return if he sells the bond? int: Calculate the price of the bond today, and use as FV to calculate the return over 2 years. our answer should be between 4.02 and 22.46, rounded to 2 decimal places, with no special characters.
wo years ago, Bob purchased a 20-year $1,000 par value zero-coupon bond for $311.80. If today (with 18 ears to maturity) the bond is priced to yield 5.15%, what is his annualized return if he sells the bond? int: Calculate the price of the bond today, and use as FV to calculate the return over 2 years. our answer should be between 4.02 and 22.46, rounded to 2 decimal places, with no special characters.
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:Two years ago, Bob purchased a 20-year $1,000 par value zero-coupon bond for $311.80. If today (with 18
years to maturity) the bond is priced to yield 5.15%, what is his annualized return if he sells the bond?
Hint: Calculate the price of the bond today, and use as FV to calculate the return over 2 years.
Your answer should be between 4.02 and 22.46, rounded to 2 decimal places, with no special characters.
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