BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 8% annual coupon rate and a 15-year maturity. At the time of the purchase, it had an expected yield to maturity of 10.45%. If Janet sold the bond today for $820.17, what rate of return would she have earned for the past year?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 10P
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BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 8%
annual coupon rate and a 15-year maturity. At the time of the purchase, it had an expected
yield to maturity of 10.45%. If Janet sold the bond today for $820.17, what rate of return
would she have earned for the past year?

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