Calculate average annual return, Financial Management

Assignment Help:

Q. Calculate Average Annual Return?

An investor buys a bond in 1978 maturity in 1980 at Rs.900. It has a maturity value of 10 years and par value of Rs. 1000. It fetches RS.90 every year. Calculate yield.

Solution:

Current Yield = Annual Cash Price 90, Purchase Price 900= 10%

Yield to Maturity = Average Annual Return Average Investment C=Annual Coupon P=Purchase of Price 1000 - 900

Average Annual Return = 90 +10= 100

Yield to Maturity = 100*100=10.5%

950

M= Maturity of par value of bond

N= Number of years remaining to maturity

Stock or Share

The return on stocks is measured by finding out dividend yield. Dividend yields can be estimated on expected yields as well as actual yields.


Related Discussions:- Calculate average annual return

Describe the merits and demerits of mutual funds, Question 1 Briefly expla...

Question 1 Briefly explain the important legislations that regulates the insurance sector Question 2 What do you mean by sales cycle? Briefly explain the different stages in

Yield to put, Yield to put is the rate at which the present val...

Yield to put is the rate at which the present value of cash flow to the first put date is equal to the price plus interest rate. It is used for

Calculate the interest rate on the investment, Jessica is given the opportu...

Jessica is given the opportunity to invest $5,000 now and receive $5,700 at the end of one year. However, she could only invest $1,000 of her own money and would need to borrow the

What are factors influenced the shape of the yield curve, What are number o...

What are number of factors that influence the shape of the yield curve? There are some of factors which influence the shape of the yield curve as follows: (1) Expectations

Explain the importance of supplier appraisal, QUESTION (a) List the fiv...

QUESTION (a) List the five elements of the purchasing mix. (b) Describe briefly the four essential elements of a legally binding contract. (c) Distinguish between perform

Cash flow matching, Cash flow matching strategy is used to build a ...

Cash flow matching strategy is used to build a bond portfolio wherein the cash flows of the bond portfolio exactly match a stream of liabilities. The most s

Price-yield relationship of a callable bond, Price-Yield Relationship of a ...

Price-Yield Relationship of a Callable Bond The price-yield relationship of a non-callable or a non-puttable bond is convex because price and yield are inversely proportional.

Jit inventory control system primary recuirement, What are the primary requ...

What are the primary requirements for a successful JIT inventory control system? For a JIT system to be victorious the supplier must be willing and able to deliver materials im

Financial management, DEFINITION OF FINANCIAL MANAGEMENT The term finan...

DEFINITION OF FINANCIAL MANAGEMENT The term financial management has been described by management experts in several ways reflecting the duties and responsibilities of a financ

Explain the tests of controlor systems based auditing, Tests of controlor s...

Tests of controlor systems based auditing Tests to obtain audit evidence about effective operation of the accounting and internal control systems. It isn't concerned about deta

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd