You buy a bond with a $1,000 par value today for a price of $900. The bond has five years to maturity and makes annual coupon payments of $80 per year. You hold the bond to maturity, but you do not reinvest any of your coupons. What was your realized compound return over the holding period?
You buy a bond with a $1,000 par value today for a price of $900. The...
Horizon Analysis • Example: Suppose you buy a 30-year, 7.5% (annual payment) coupon bond for $98 0 (when its yield to maturity is 7.67%) and you plan to hold it for 20 years. Your for ecast is that the bond's yield to maturity will be 8% when it is sold and the reinvest ment rate on the coupons will be 6%. What is realized compound return? At the end of your investment horizon, the bond will have 10 years remaining...
Example: Suppose you buy a 30-year, 7.5% (annual payment) coupon bond for $98 0 (when its yield to maturity is 7.67%) and you plan to hold it for 20 years. Your for ecast is that the bond's yield to maturity will be 8 % when it is sold and the reinvest ment rate on the coupons will be 6%. What is realized compound return?
You buy a bond with a par value of $1000 and a coupon rate of 9% with 21 coupons remaining. You hold the bond and receive 7 coupons. If the bond had a YTM of 8% when you bought it and 7% when you sold it, what was your annual holding period ROR?
Suppose that you invest in a two-year Treasury bond with a coupon rate of 6% and $1,000 par. Suppose that you buy this bond at a price of exactly $1,000. You intend to hold this bond to maturity and reinvest the coupons until the bond matures. You expect to reinvest the coupons in an account that pays an APR of 2.83%, with semi-annual compounding. What is the effective annual rate of return on your investment?
Saved Help Save &Exit Su You buy an 7-year $1,000 par value bond today that has a 540% yield and a 540% annual payment coupon. In 1 year prom sed yields have risen to 6.40%. Your 1year holding period return was-. Multiple Choice 1.08% -486% -272% 0.54%
Two years ago you have purchased a bond with $1000 par, semi-annual coupons with a coupon rate of 8% and maturity of 20 years for $ 1,200. Calculate your holding period return for this bond over the last two years, if you were able to reinvest coupons at 11% and the current YTM is 7%!
You buy an 9-year $1,000 par value bond today that has a 6.50% yield and a 6.50% annual payment coupon. In 1 year promised yields have risen to 7.50%. What would be the EAR be? And how do you calculate it? How does it compare to Holding period of 1 year?
Suppose that you invest in a two-year Treasury bond with a coupon rate of 6% and $1,000 par. Suppose that you buy this bond at a price of exactly $1,000. You intend to hold this bond to maturity and reinvest the coupons until the bond matures. You expect to reinvest the coupons in an account that pays an APR of 2.01%, with semi-annual compounding. What is the effective annual rate of return on your investment? Hint: see Example 8 in...
A bond has a quoted price of $900 today. It has a face value of $1,000, coupon rate of 12%, and a time to maturity of 6 years. Coupons are paid every month. What is its yield to maturity?
2. Suppose that you buy a 10 percent coupon, 3-year bond today with a par value of $1,000. The bond pays coupons semiannually. (a) Sketch the future cash flows of this bond. (b) If the yield to maturity is 5 percent, what is the current bond price? (c) In light of your answer to (b), is this a discount bond or a premium bond? 2 A