What is the total rate of return on the bond

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Reference no: EM132024583

Consider a bond (with par value = $1,000) paying a coupon rate of 7% per year semiannually when the market interest rate is only 6% per half-year. The bond has 3 years until maturity.

a. Find the bond's price today and 6 months from now after the next coupon is paid. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Current price ____________ $

Price after six months __________ $

b. What is the total (6-month) rate of return on the bond? (Omit the "%" sign in your response.)

Rate of return _____________ %

Reference no: EM132024583

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