Exactly two years ago today James purchased a ten-year $100,000 bond and the price he paid was P= 102,500. The bond coupon rate is j2= 5 % and the bond is redeemable at 105. James sold the bond today (just after today's coupon payment was made) for $103,250. Using the method of averages calculate James's total return (j2) over the time that he owned this bond.
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- Last year Janet purchased a $1,000 face value corporate bond with an 8%annual coupon rate and a 15-year maturity. At the time of the purchase, it had an expectedyield to maturity of 10.45%. If Janet sold the bond today for $820.17, what rate of returnwould she have earned for the past year?Last year, Joan purchased a $1,000 face value corporate bond with an 8% annual coupon rate and a 20-year maturity. At the time of the purchase, it had an expected yield to maturity of 9.63%. If Joan sold the bond today for $942.31, what rate of return would she have earned for the past year? Round your answer to two decimal places.Sascha owns stock in Lewis Corp and she bought a $5,000 corporate bond. She received $52.50 in quarterly interest from the bond. Sascha also owns stock in Lewis Corp which is worth $46 per share, and it pays a $2 annual dividend. If Lewis Corp later offers corporate bonds at an annual interest rate that is one percent higher than half the of the bond Sascha bought, create an equation that models the quarterly interest earned, q, for any given bond face value, v.
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