Jamal bought a 5% $1000 20-year bond for $925. He received a semiannual dividend for 8 years, then sold it immediately after the 16th dividend for $800. Did Jamal make the return of 5% per year compounded semiannually that he wanted? Solve using (a) factors, and (b) a spreadsheet.
Jamal bought a 5% $1000 20-year bond for $925. He received a semiannual dividend for 8 years, then sold it immediately after the 16th dividend for $800. Did Jamal make the return of 5% per year compounded semiannually that he wanted? Solve using (a) factors, and (b) a spreadsheet.
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 2P
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Jamal bought a 5% $1000 20-year bond for $925. He received a semiannual dividend for 8 years, then sold it immediately after the 16th dividend for $800. Did Jamal make the return of 5% per year compounded semiannually that he wanted? Solve using (a) factors, and (b) a spreadsheet.
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