EBK FOUNDATIONS OF FINANCE
EBK FOUNDATIONS OF FINANCE
10th Edition
ISBN: 9780135160473
Author: KEOWN
Publisher: PEARSON CO
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Chapter 7, Problem 5SP

(Bond valuation) At the beginning of the year, you bought a $1,000 par value corporate bond with a 6 percent annual coupon rate and a 10-year maturity date. When you bought the bond, it had an expected yield to maturity of 8 percent. Today the bond sells for $1,060.

  1. a. What did you pay for the bond?
  2. b. If you sold the bond at the end of the year, what would be your one-period return on the investment?
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EBK FOUNDATIONS OF FINANCE

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