Eagles industries bonds have a 10-year maturity and a 7.65% coupon paid semiannually. They sell at their $1,000 par value, and are not callable. What is their he effective annual rate (EFF%) for these bonds?
Recall that eff% = [1 + (Nominal Rate/ n)]^n -1
Two years ago, bob purchased a 20 year $1,000 par value zero-coupon bond for $311.80. If today (with 18 years to maturity) the bond is priced to yield 5.15% what is his annualized return to sell the bonds?