YTM and YTC Rates investors earn from owning bonds A bond has a face value of: 400,000 It's annual coupon rate is: 4.7% Originally, it had this many years until it matured: 22 Years since issuing the bond 3 Bonds can be called for 412,000 Original provision to delay calling bonds (in years) 10 Current price of bond 364,000 1. What annual rate of return would an investor earn if she held the bond until it matured? A Between 0.0% and 4.0% B Between 4.0% and 5.0% C Between 5.0% and 6.0% D Between 6.0% and 9.0%
YTM and YTC Rates investors earn from owning bonds A bond has a face value of: 400,000 It's annual coupon rate is: 4.7% Originally, it had this many years until it matured: 22 Years since issuing the bond 3 Bonds can be called for 412,000 Original provision to delay calling bonds (in years) 10 Current price of bond 364,000 1. What annual rate of return would an investor earn if she held the bond until it matured? A Between 0.0% and 4.0% B Between 4.0% and 5.0% C Between 5.0% and 6.0% D Between 6.0% and 9.0%
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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Question
| YTM and YTC | |||||||||
| Rates investors earn from owning bonds | |||||||||
| A bond has a face value of: | 400,000 | ||||||||
| It's annual coupon rate is: | 4.7% | ||||||||
| Originally, it had this many years until it matured: | 22 | ||||||||
| Years since issuing the bond | 3 | ||||||||
| Bonds can be called for | 412,000 | ||||||||
| Original provision to delay calling bonds (in years) | 10 | ||||||||
| Current price of bond | 364,000 | ||||||||
| 1. What annual |
|||||||||
| until it matured? | |||||||||
| A Between 0.0% and 4.0% | |||||||||
| B Between 4.0% and 5.0% | |||||||||
| C Between 5.0% and 6.0% | |||||||||
| D Between 6.0% and 9.0% | |||||||||
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