Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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10.
Five years ago you purchased an 8% coupon bond for $975. Today you sold the bond for $1,000. (Round your answers to 2 decimal places.)
a. What is your
b. What is your rate of return if all coupons were reinvested in your bank account, which pays 1% interest until the bond is sold?
c. What is your rate of return if all coupons were reinvested at 8.64% until the bond is sold?
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- klp.3arrow_forward1. Suppose that someone wanted to buy a $1,000 face value T-bond that matures in November 2001. How much would it have cost on Black Monday? Answer: S per $1,000 face valuearrow_forward3. You own several bonds and as an astute investor, you keep track of your interest payments (also known as coupon payments or cash flows). Annually, you receive a fixed total of interest payments of $2,000 per year from these bonds for the next 5 years and your required rate of return is 7.5%. What is the current value of your bond investment? Show your work and explain your answer.arrow_forward
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