Wednesday 14 August 2013

The Evergreen Bank has purchased a bond that has a coupon rate of 5.5% and a face value of $1000. It has 11 years to maturity and is selling in the market for $887.52. The bond makes annual coupon payments. The Evergreen l Bank is planning on selling this bond at the end of 5 years for $1036.50. What is the holding period return on this bond? Answer 5.5% 7% 11% 9% None of the above

The Evergreen Bank has purchased a bond that has a coupon rate of 5.5% and a face value of $1000. It has 11 years to maturity and is selling in the market for $887.52. The bond makes annual coupon payments. The Evergreen l Bank is planning on selling this bond at the end of 5 years for $1036.50. What is the holding period return on this bond?
Answer
  5.5%
  7%
  11%
  9%
  None of the above
Answer
9%

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