Question

You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.7%. What is your return over the 6 months? (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

Answer 1

1 Bond purchase price 2 Bond sale price 3 $ $ B. 816.07 |=PV(9.7%/2,20*2,76/2,1000,0)*-1 815.14 |=PV(10.7%/2,19.5,76/2,1000,0)*-1 4 Rate of return 4.54%

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