Economics

posted by .

You bought the bond for $1,040, after 6 months you received a coupon of $35 and after another 6 months you received another $35 coupon and you sold the bond for $1,070. What would be your total dollar return in that case? What would be your total percentage return?

Would the total dollar return be $100 [(1070 – 1040)+35+35]?

Would the total percentage return be 9.62% [[(1070 – 1040)+35+35]/1040]?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Finance

    Some institutional investors prefer zero coupon bonds over coupon bonds of the same maturity (and same quality). They will ever purchase a lower YTM zero coupon than the same maturity coupon bond. Which statement below best describes …
  2. Finance (Coupon Bonds)

    I am having a hard time starting on how to calculate this please. You purchased a $1,000 five percent coupon bond that matures in 10 years. How much would your bond be worth if interest rates fall to 4% the day after you purchase the …
  3. mba

    (Default risk) You buy a very risky bond that promises a 9.5% coupon and return of the $1,000 principal in 10 years. You pay only $500 for the bond. a. You receive the coupon payments for three years and the bond defaults. After liquidating …
  4. Finance

    You buy a very risky bond that promises a 9.5% coupon and return of the $1,000 principal in 10 years. You pay only $500 for the bond. You receive the coupon payments for 3 years and then the bond defaults. After liquidating the firm, …
  5. Finance

    (Default risk) You buy a very risky bond that promises a 9.5% coupon and return of the $1,000 principal in 10 years. You pay only $500 for the bond. a. You receive the coupon payments for three years and the bond defaults. After liquidating …
  6. Finance

    Assume that you have a bond with a 22-year life, a five percent coupon rate, semi-annual coupon payments and the bond is priced at 103. a) What is the YTM b) if the bond is callable after 3 yrs, What is the YTC?
  7. Math

    You bought the bond for $1,040, after 6 months you received a coupon of $35 and after another 6 months you received another $35 coupon and you sold the bond for $1,070. What would be your total dollar return in that case?
  8. Finance

    Six years ago, Bradford Community Hospital issued 20-year municipal bonds with a 7% annual coupon rate. The bonds were called today for a $70 call premium- that is, bondholders received $1,070 for each bond. What is the realized rate …
  9. MathematicalModels

    A default-free coupon bond maturing in 6 months, that pays a coupon of 2.00 after 3 months and makes a final payment of 102.00 (the last coupon and the principal), trades at 101.00 today. Moreover, a 3-month default-free zero-coupon …
  10. Mathematical Models

    A default-free coupon bond maturing in 6 months, that pays a coupon of 2.00 after 3 months and makes a final payment of 102.00 (the last coupon and the principal), trades at 101.00 today. Moreover, a 6-month default-free zero-coupon …

More Similar Questions