Janice V. bought a 10% $1000 20-year bond for $1000. She received a semiannual dividend for 8 years, then sold it immediately after the sixteenth dividend for $950. What rate of return did she make per semiannual period, and per year (nominal)? The rate of return that she made per semiannual period is The rate of return that she made per year is [

Janice V. bought a 10% $1000 20-year bond for $1000. She received a semiannual dividend for 8 years, then sold it immediately after the sixteenth dividend for $950. What rate of return did she make per semiannual period, and per year (nominal)? The rate of return that she made per semiannual period is The rate of return that she made per year is [

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 2PROB

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Janice V. bought a 5% $1000 twenty-year bond for $925. She received a semiannual dividend for 8 years, then sold it immediately after the 16th dividend for $800. What rate of return did she make (a) per semiannual period, and (b) per year (nominal)?
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