If the current price of a 10-year 4.5% coupon bond which pays semiannually is $96.10, what is its yield to maturity? If you purchased this bond, held it for three years and the yield to maturity fell to 4.75%, what would its new price be? If you then sold the bond what effective rate of return would you have earned on this three-year investment? Assume there are no taxes to consider
If the current price of a 10-year 4.5% coupon bond which pays semiannually is $96.10, what is its yield to maturity? If you purchased this bond, held it for three years and the yield to maturity fell to 4.75%, what would its new price be? If you then sold the bond what effective rate of return would you have earned on this three-year investment? Assume there are no taxes to consider
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 11P
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If the current price of a 10-year 4.5% coupon bond which pays semiannually is $96.10, what is its yield to maturity? If you purchased this bond, held it for three years and the yield to maturity fell to 4.75%, what would its new price be? If you then sold the bond what effective
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