You purchased a zero coupon bond one year ago for $296.50. The market interest rate is...
You purchased a zero coupon bond one year ago for $296.50. The market interest rate is now 6.5 percent. If the bond had 15 years to maturity when you originally purchased it, what is your total return to date if the face value of the bond is $1,000? (Hint: Use the information provided to calculate the price of the zero coupon bond today.) A) 37.74 percent B) 27.40 percent C) 23.35 percent D) 19.95 percent E) 32.58 percent
Homework Answers
![Price at the end of the year = present value of the par value of bond $408.39 [ 1000/(1.0325428)] Total return = 37.74% (408.](http://img.homeworklib.com/questions/95c58400-4703-11ea-8c07-b5ffc731d2c0.png?x-oss-process=image/resize,w_560)
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