You buy a 20-year bond with a coupon rate of 9.4% that has a yield to maturity of 10.4%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 11.4%. What is your return over the 6 months?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
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You buy a 20-year bond with a coupon rate of 9.4% that has a yield to maturity of 10.4%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 11.4%. What is your return over the 6 months?

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