You have just purchased a $1,000 bond with 7% annual coupon and maturity in 10...
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Accounting
You have just purchased a $1,000 bond with 7% annual coupon and maturity in 10 years.
If the yieldtomaturity is 6%, how much did you pay for the bond?
If, 1 year later and on the day after you receive the first coupon, the bonds yieldtomaturity goes up to 8%, and you need cash and have to liquidate your investment. What will be your selling price?
What will be your 1year holding period rate of return?
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