You purchased a $1,000 par value bond one year ago at a price of $1050 when it was issued. At the time of purchase, the bond had 6 years to maturity and a 8.5% coupon rate. The payments are semiannually. Today, the bond has a yield to maturity of 6%. What is your total realized return (in percentage) as of today?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 16P
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You purchased a $1,000 par value bond one year ago at a price of $1050 when it was issued. At the time of purchase, the bond had 6 years to maturity and a 8.5% coupon rate. The payments are semiannually. Today, the bond has a yield to maturity of 6%. What is your total realized return (in percentage) as of today?

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