Rate of return on investment, Finance Basics

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Rate of return on investment

Problem:

Suppose that at time 0 you buy a 6%-coupon 30-year bond priced at par, and at time 0.5 you sell this bond at a yield of 8%.

Required:

Question 1: What is your time 0.5 payoff per $1 of initial investment?

Question 2: What is the rate of return on your investment (annualized, with semi-annual compounding)?

Explain in detail.

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Finance Basics: Rate of return on investment

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Finance Basics: Rate of return on investment

Reference No:- TGS0877456

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Share of this stock

Q : Zero growth stock is expected to pay

Q : Write ethical implications of implementing a change

Q : Expected return standard deviation russell fund

Q : Rate of return on investment

Q : Yield curve is upward-sloping

Q : Long position in a zero- coupon bond

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Rate of return on investment

Reference No:- TGS0877456

Recent Questions Asked Finance Basics

Q : Share of this stock

Q : Zero growth stock is expected to pay

Q : Write ethical implications of implementing a change

Q : Expected return standard deviation russell fund

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Q : Yield curve is upward-sloping

Q : Long position in a zero- coupon bond

Q : Financial statements filed with the sec

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