Ask Question
19 April, 22:19

Rachel McGovern bought a 10-year bond for $921.77 seven years ago. The bond pays a coupon of 15 percent semiannually. Today, the bond is priced at $961.22. If she sold the bond today, what would be her realized yield

+5
Answers (1)
  1. 19 April, 22:22
    0
    17%

    Explanation:

    Purchase price of bond = $921.77

    Years investment held = n = 7

    Coupon rate = C = 15%

    Frequency of payment = m = 2

    Annual coupon = $1,000 * (0.15/2) = $75.00

    Realized Yield = i

    Selling price of bond = PB = $961.22

    The realized rate of return is approximately 16.6 percent. Using a financial calculator provided an exact yield of 16.625 percent.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Rachel McGovern bought a 10-year bond for $921.77 seven years ago. The bond pays a coupon of 15 percent semiannually. Today, the bond is ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers