The yield to maturity on a bond is the interest rate you

Assignment Help Finance Basics
Reference no: EM13615991

The Yield To Maturity on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually see the bond before it matures, your realized return is known as the holding period yield (HPY).

a. Suppose that today you buy a 7 percent annual coupon bond for $1,160. The bond has 15 years to maturity. What rate of return do you expect to earn on your investment?

b.Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. What price will your bond sell for?

c. What is the HPY on your investment?

Reference no: EM13615991

Questions Cloud

Your grandfather invested 1000 in a stock 27 years ago : your grandfather invested 1000 in a stock 27 years ago. currently the value of his account is 226000. what is his
The corrosive effects of various soils on coated and : the corrosive effects of various soils on coated and uncoated steel pipe was tested by using a dependent sampling plan.
Find the position of m as a function of time evaluate : a spring without mass has natural length lo. one end is stuck to a fixed point and the other attached to a mass m. the
Capital co has a capital structure based on current market : 1. chips home brew whiskey management forecasts that if the firm sells each bottle of snake-bite for 20 then the
The yield to maturity on a bond is the interest rate you : the yield to maturity on a bond is the interest rate you earn on your investment if interest rates dont change. if you
Suppose a point xy is chosen at random from the disk x2 y2 : suppose a point xy is chosen at random from the disk x2 y2 is less than and equal to 1. find the a marginal density of
What is the magnitude of the torque due to friction between : a disk with a mass of 11 kg a diameter of 25 cm and a thickness of 8 cm is mounted on a rough horizontal axle as shown
A japanese company has a bond outstanding that sells for 94 : a japanese company has a bond outstanding that sells for 94 percent of its ?100000 par value. the bond has a coupon
Miller corporation has a premium bond making semiannual : miller corporation has a premium bond making semiannual payments. the bond pays a coupon of 12 percent has a ytm of 10

Reviews

Write a Review

Finance Basics Questions & Answers

  A municipal bond carries a coupon rate of 6 34 and is

a municipal bond carries a coupon rate of 6 34 and is trading at par. what would be the equivalent taxable yield of

  Which one is truly the better offer

You are quoted two loan rates: 1) a 9% APR with weekly compounding and 2) a 9.2% APR with yearly compounding. Which one is truly the better offer? Do the necessary calculations to support your answer.

  What must the nominal interest rates be on the second option

What must the nominal interest rates be on the second and third options to make all the investments earn the same yield?

  How does enron rise and collapse illustrate this proposition

As explained in previous lessons, all Bubbles start for a logical reason but when they collapse scams and scandals are often exposed. How does Enron's rise and collapse illustrate this proposition?

  Southwest airlines acquisition strategy for airtran

Describe what the management rationale (motive) behind the acquisition of AirTran, whether you agree with the management or you differ with the management strategy.

  Inventory continues to be a challenge for healthcare

inventory continues to be a challenge for healthcare managers. using the fifo and lifo methods of inventory analyze the

  What is the present value of the cash flows

You will receive $1,200 at the end of the next 15 years, assuming a 8% discount rate, what is the present value of the cash flows?

  Assume that todays required rate of return on these bonds

assume that whirledcom has an issue of 15 year 1000. par value bonds that pay 6 interest semi-annually. further assume

  How the fed monetary policy may indirectly affect

Explain how the Fed influences the monthly mortgage payments on homes. How might the Fed indirectly influence the total demand for home by consumers?

  Derive a formula to determine the increase in the annual

subsidiary x sells 10000 units to subsidiary y annually. the marginal income tax rate for subsidiary x is 30 and the

  What is the operating cash flow during 2014 what is the

weiland co. shows the following information on its 2014 income statement sales 157000 costs 81100 other expenses

  What is the expected return on the market

The stock of United Industries has a beta a 1.26 and an expected return of 11.4. The risk-free rate of return is 5 percent. What is the expected return on the market? HINT: Use the Security Market Line.

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