Suppose you buy a 72 percent coupon bond today for 1140 the, Ask an Expert

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Suppose you buy a 7.2 percent coupon bond today for $1,140. The bond has 10 years to maturity.

a. What rate of return do you expect to earn on your investment? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Rate of return %

b-1. Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What price will your bond sell for? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Price $

b-2. What is the annual realized yield on your investment? (Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Realized return %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92416502

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