What is the percentage holding period return

Assignment Help Financial Management
Reference no: EM131087629

On January 1, 2006 you purchased $10,000 face value amount of the 6.125% coupon Citigroup bond maturing on August of 2025. The purchase price was 103.95%. On December 31, 2006 you sell your holding of this bond for a price of 103.85%. What is the percentage holding period return?

Reference no: EM131087629

Questions Cloud

Inverse relationship between bond prices and yields : There is an inverse relationship between bond prices and yields. This inverse relationship will be demonstrated by calculating bond prices to show that interest rates move inversely: if yields rise, then bond prices fall.
How much should it pay virgina for her note : Victor owes $6500 to Virginia. The loan is payable in one year at 6% interest. Virginia needs cash to pay medical bills,so four months before the loan is due,she sells the note (loan) to the bank. If the bank wants a return of 9% on its investment,ho..
Exercised prior to maturity : Stock price of A is $80 now. Over each of the next three-month periods it is expected to go up by 10% or down by 7%. The stock has a quarterly dividend yield of 10%. If the riskfree rate is 5%o p.a., what is the current value of a 6-month call option..
Determine the price of ibm call option : A call option on IBM has an exercise price of 100, the share price S is 120. The option will expire in 6 months, and the riskfree rate is 10Yo p.a. and the historical variance of the returns of IBM is I2Yo p.a. Before the option expires, IBM is expec..
What is the percentage holding period return : On January 1, 2006 you purchased $10,000 face value amount of the 6.125% coupon Citigroup bond maturing on August of 2025. The purchase price was 103.95%. On December 31, 2006 you sell your holding of this bond for a price of 103.85%. What is the per..
The investor required rate of return : You are interested in buying a $1,000 par value bond with 10 years to maturity and an 8 percent coupon rate that is paid semiannually. How much should you be willing to pay for the bond if the investor's required rate of return is 10 percent?
Compare the two options in terms of monthly payments : At the end of each year, a worker invests $2,000 into an account the draws 4% interest. The worker makes every payment for the next 30 years except for the payment at the end of year 10. That is, no money is invested at the end of year 10. How much m..
What rate of return is the buyer expecting to make : Joe Black just won a $550,000 lottery in Pennsylvania. Instead of receiving a lump sum, he found that he would receive $25,500 annually (end of year) for 20 years. Joe is 75 years old and wants his money now. He has been offered $140,827 to sell his ..
What is the company target debt-equity ratio : Fama’s Llamas has a weighted average cost of capital of 10.3 percent. The company’s cost of equity is 12 percent, and its pretax cost of debt is 8.3 percent. The tax rate is 38 percent. What is the company’s target debt−equity ratio?

Reviews

Write a Review

Financial Management Questions & Answers

  How much was in account ten years after deposit was made

Six years after Mr. Robertson deposited $7110.00 in a savings account that earned interest at 6.8% p.a., compounded semi-annually, the interest was changed to 7.2% p.a., compounded quarterly. How much was in the account ten years after the deposit wa..

  What was the bond current yield

Consider the following information form September 15th, 2012 for a coupon bond with face valueof $1000 and maturity on September 15th, 2014:  What was the bond current yield? Why is the bond's yield to maturity greater than its coupon rate?

  What would be involved in the production

Think of a product that you could produce either as a company or an individual. What would be involved in the production? What are the direct costs? Indirect costs? Overhead?

  Assume the total cost of a college education

Assume the total cost of a college education will be $200,000 when your child enters college in 15 years. You presently have $80,000 to invest. What rate of interest must you earn on your investment to cover the cost of your child's college education..

  What is the yield to maturity for the investment

Air products and Chemicals sold $125 million of notes in Nov. of 2003 with a December 1. 2010, maturity date. The bonds were sold at a discount of $99.721 per $100 with a coupon rate of 4.125%. Assume that bonds with a face value if $10,000 were purc..

  Reduce the weighted average cost of capital for firm

Which of the following would tend to reduce the weighted average cost of capital for a firm? Suppose that Acme Inc. is issuing 10-year bonds that are not callable. The required rate of return that the firm must pay to bondholders is 10%. They are als..

  What must be the risk-free rate

Assume both portfolios A and B are well diversified, that E(rA) = 14% and E(rB) = 14.8%. If the economy has only one factor and βA = 1 while βB = 1.1, what must be the risk-free rate?

  The expected return for the account

In 4 years from today, Steph plans to invest 7,800 dollars in an account that is expected to earn 3.95 percent per year. She also expects to make an investment of X in the same account in 3 year(s) from today. What is X if Steph expects to have 27,60..

  Create a portfolio equally as risky as the market

You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investment Beta Stock A $ 146,000 .91 Stock B $ 134,000 1.36 Stock C 1.51 Risk-free asset..

  Expected cash inflows-what is the projects payback

Project K costs $50,000, its expected cash inflows are $14,000 per year for 9 years, and its WACC is 12%. What is the project's payback?  Project K costs $40,000, its expected cash inflows are $9,000 per year for 8 years, and its WACC is 11%. What is..

  Dividends and dividend policy

Essentials of Corporate Finance (8th Ed.): Dividends & Dividend Policy. Paul Inc. announced a $1.50 per share dividend with an ex-date of May 15. If the closing price of Paul's stock was $35 on May 14, what would we expect the price to be on the clos..

  Shares of common stock to the public at a price

In 1970, Wal-Mart offered 300,000 shares of common stock to the public at a price of $16.50 per share. The stock is now worth $10,887,600.00 (2010). What is the rate of return over the 40 year period?

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