You purchased an annual-interest coupon bond one year ago with 7 years remaining to maturity at the time of purchase. The coupon interest rate is 10%, and par value is $1,000. At the time you purchased the bond, the yield to maturity was 9%. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 8%, your annual total rate of return on holding the bond for that year would have been O 12.58% O 13.53% O4.01% O 14.64% O5.12%

You purchased an annual-interest coupon bond one year ago with 7 years remaining to maturity at the time of purchase. The coupon interest rate is 10%, and par value is $1,000. At the time you purchased the bond, the yield to maturity was 9%. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 8%, your annual total rate of return on holding the bond for that year would have been O 12.58% O 13.53% O4.01% O 14.64% O5.12%

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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You purchased a zero coupon bond one year ago for $120.36. The bond has a par value of $1,000 and the market interest rate is now 13 percent. If the bond had 17 years to maturity when you originally purchased it, what was your total return for the past year? Assume semiannual compounding.
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Please provide complete step by step asnwer: You purchased an annual interest coupon bond one year ago that had six years remaining to maturity at that time. The coupon interest rate was 10%, and the par value was $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the yield to maturity continued to be 8%, your annual total rate of return on holding the bond for that year would have been A) 7.00%. B) 7.82%. C) 8.00%. D) 11.95%. E) None of the options are correct.
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You purchased a zero-coupon bond one year ago for $278.33. 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? 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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