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with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 76%, and sells for $1,140. Interest is paid annually a. If the bond has a yield to maturity of 10.4% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your anser to nearest whole number.) b. What will be the annual rate of return on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return c. Now assume that interest is paid semiannually. What will be the annual rate of return on the bond? Prey6 of 23 Next > o search
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1 a) Price $841.28 -PV(10.4%,976,1000)-1 3 b) Rate of return -19.54%-(841.28-76-1140/1140 4 5 c)Price 7 Rate of return 9 Correct option is Slightly less than your part b answer $ 838.87 PV(10.4%/2,9*2,76/2,1000)*-1 19.75%)-(838.87+76-1140)/1140 10 d) Real rate of return -21.88%-(1-19.54%)/(1+3%)-1 11

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