Homework Answers
Rate of return=(Coupon received) - PV (brought) - FV (sale price ) / PV
Bond par value= 1000
Coupon received= 6.5% × 1000= 65
Rate of return =(65 -(1054.47 - 1037.19)) /1054.47
Rate of return =( 65 - 17.28) /1054.47
Rate of return = 47.72/1054.47= 4.53%
Note: 17.28 is loss on sale
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