please explain the steps 1. Suppose you buy a 30 year,...
60.1K
Verified Solution
Link Copied!
Question
Accounting
please explain the steps
1. Suppose you buy a 30 year, 7.5% annual coupon bond for $980 (when its YTM=7.67\%), and you plan to hold the bond for 20 years. Your forecast is that the bond's YTM will be 8% when it is sold and that the reinvestment rate on coupons will be 6%. What is the realized compound return.? 2. Consider a 30 year bond paying annual coupon of $80 and selling at par value of $1000. The bond's initial YTM is 8%. What is the HPR if yields at the end of the year increase to 9%
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
