K = N |
Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k] + Par value/(1 + YTM)^N |
k=1 |
K =38 |
Bond Price =∑ [(4*1000/100)/(1 + 8/100)^k] + 1000/(1 + 8/100)^38 |
k=1 |
Bond Price = 526.8452 |
rate of return/HPR = ((Selling price+Coupon amount)/Purchase price-1) |
=((526.8452+40)/602.05-1) |
=-5.85% |
A bond is issued with a coupon of 4% paid annually, a maturity of 39 years,...
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