Bondholders' expected rate of return) The market price is $1000 for a 16-year bond ($1000 par value) that pays 8 percent interest (4 percent semiannually). What is the bond's expected rate of return? The bond's expected annual rate of return is
use financial calculator function as below
FV=1000 is the face value or par value of the bond
PV=-1000 is the present value or current price of the bond
N=16*2=32 semi annual period
PMT=1000*8%/2=40
Click CPT
Click I/Y=4.00% is semi annual rate
The bond's expected annual rate of return is=2*semi annual rate=2*4.00%=8.00% (answer)
the above is answer..
Bondholders' expected rate of return) The market price is $1000 for a 16-year bond ($1000 par...
(Bondholders' expected rate of return) The market price is $1,050 for a 16-year bond ($1,000 par value) that pays 9 percent interest (4.5 percent semiannually. What is the bond's expected rate of return? The bond's expected annual rate of return is % (Round to two decimal places.)
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