What rate of return do you expect to earn on your investment

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Reference no: EM131182837

Suppose you buy a 8.8 percent coupon bond today for $1,090. The bond has 10 years to maturity.

a. What rate of return do you expect to earn on your investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Rate of return:_________%

b. 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? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Price: ____ $

Reference no: EM131182837

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