Suppose you bought bond with an annual coupon rate

Assignment Help Financial Management
Reference no: EM13908844

Suppose you bought a bond with an annual coupon rate of 7.2 percent one year ago for $945. The bond sells for $990 today.

Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?

What was your total nominal rate of return on this investment over the past year?

If the inflation rate last year was 3 percent, what was your total real rate of return on this investment?

Reference no: EM13908844

Questions Cloud

Specify the development process model : We are doing project 'Website Development" as a group. We need to do SPMP. My part in SPMP. we are using spiral methology from project. please explain how we use spiral methodology to my project in process model.
What is your problem solving style : Explain how children problem solve and how this investigation in particular helps them to develop their problem-solving skills. What is your problem solving style? Explain how this will affect your student experiences and your classroom practices
Cash flow sequence in factor notation : Suppose you have this cash flow sequence in factor notation: Show the cash flow sequence as a comma separated list starting in time period zero. For example P=2(P|A,i,4) would be shown as:
What tentative conclusions can you draw about debt position : Find their financial statements on the Internet and examine the shareholders' equity section of their balance sheets. What does your analysis tell you about each firm? Is this a good investment? Explain your findings and conclusion.
Suppose you bought bond with an annual coupon rate : Suppose you bought a bond with an annual coupon rate of 7.2 percent one year ago for $945. The bond sells for $990 today. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? What was your total nomin..
Banks savings and loan offering introductory rate : You receive a credit card application from Shady Banks Savings and Loan offering an introductory rate of 3.2 percent per year, compounded monthly for the first six months, increasing thereafter to 18.1 percent compounded monthly. Required: Assuming y..
Differences in organizational components and actions : The first section (5-6 pages) is to be a compare/contrast essay where you illustrate the similarities and differences in organizational components, actions, and attributes promoting a healthy culture and organizational components, actions, and att..
Evaluate proposed acquisition of special-tax operating costs : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $20,600. Use of the truck wil..
Why is financial statement important : Why is financial statement important and who could it benefit?

Reviews

Write a Review

Financial Management Questions & Answers

  Percentage change in the price of bonds

Bond J has a coupon rate of 4.3 percent. Bond S has a coupon rate of 14.3 percent. Both bonds have eleven years to maturity, make semi annual payments, and have a YTM of 9.6 percent. If interest rates suddenly rise by 3 percent, what is the percentag..

  Find the present value of these cash flows

You have accumulated some money for your retirement. You are going to withdraw $$99035 every year at the end of the year for the next 24 years. How much money have you accumulated for your retirement? Your account pays 10.87 percent per year, compoun..

  Maximum amount pierre should be willing to pay for bond

Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Venice Corp. that pays an annual coupon of 4.67 percent. If the current market rate is 8.64 percent, what is the maximum amount Pierre shou..

  What is nominal annual on bond if face value of bond

Bonner Metals currently has 12 percent (annual coupon) bonds on the market that sell for $1,400, make semi annual payments, and mature in 16 years. What is the YTM (nominal annual) on the bond if face value of the bond is $1000?

  What does the yield curve represent

What does the yield curve represent? What does the cost of capital represent?

  What will be the new beta of the portfolio

You hold a diversified portfolio consisting of a $5,000 investment in each of 20 different common stocks. The portfolio beta is equal to 1.15. You have decided to sell one of your stocks, a lead mining stock whose b is equal to 1.0, for $5,000 net an..

  Calculate companys taxable income

ABC Co., a corporation had gross sales of $500,000 in 2008. Additionally, the company also received $100,000 in dividend income and $50,000 as interest income. The total expenditures of this company for 2008 were $272,000. Calculate company's taxable..

  What is the maximum it would be reasonable

What is the maximum it would be reasonable ( i.e., do no financial harm) for the owner of a building to pay for a new heated drive way system if it would save $1,500 per year in ploughing charges. The owner's cost of money is 15%/yr. Assume the syste..

  Analysis period and no salvage value

A steam boiler is needed as part of the design of a new plant. The boiler can be fired by natural gas, fuel oil, or coal. A decision must be made on which fuel to use. An analysis of the costs shows that the installed cost, with all controls, would b..

  Determine the interest portion of the final payment

A $1, 000, 000 business loan with an annual effective rate of 15% is being repaid with annual payments of $200, 000 plus a smaller final payment. The first payment is due one year after the loan is taken out. Determine the interest portion of the fin..

  Calculate the share price for bills bakery if earnings grow

Bill’s Bakery expects earnings per share of $3.14 next year. Current book value is $5.1 per share. The appropriate discount rate for Bill’s Bakery is 13 percent. Calculate the share price for Bill’s Bakery if earnings grow at 4.8 percent forever.

  Estimate of the current stock price and terminal value

Eberhart Manufacturing has projected sales of $145.6 million next year. Costs are expected to be $81.3 million and net investment is expected to be $15.3 million. Each of these values is expected to grow at 16 percent the following year, with the gro..

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