What would be the realized return if the investor believes the bond can be sold in...
What would be the realized return if the investor believes the bond can be sold in three years at a price of $1050 on a bond currently priced at $975 with a 4% coupon rate, $1,000 par value, and seven years until maturity?
A. 6.51% B. 4.91% C. 5.03% D. 6.47%
Homework Answers
Calculating Realized Return,
Using TVM Calculation,
I = [PV = -975, FV = 1,050, PMT = 40, N = 3]
I = 6.51%
Realized Return = 6.51%
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What would be the realized return if the investor believes the
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