You purchased an annual-interest coupon bond one year ago with six years remaining to maturity at the time of purchase. The coupon interest rate is 10%, and par value is $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 7%, your annual total rate of return on holding the bond for that year would have been A) 7.00%. B) 8.00%. C) 9.95%. D) 11.95%. E) None of the options are correct.
You purchased an annual-interest coupon bond one year ago with six years remaining to maturity at the time of purchase. The coupon interest rate is 10%, and par value is $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 7%, your annual total rate of return on holding the bond for that year would have been A) 7.00%. B) 8.00%. C) 9.95%. D) 11.95%. E) None of the options are correct.
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 5P
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2) You purchased an annual-interest coupon bond one year ago with six years remaining to maturity at the time of purchase. The coupon interest rate is 10%, and par value is $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 7%, your annual total
A) 7.00%.
B) 8.00%.
C) 9.95%.
D) 11.95%.
E) None of the options are correct.
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