Bought bond with an annual coupon rate

Assignment Help Financial Management
Reference no: EM131328841

Suppose you bought a bond with an annual coupon rate of 8 percent one year ago for $903. The bond sells for $938 today.

a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Total dollar return            $

b. What was your total nominal rate of return on this investment over the past year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Total nominal rate of return             %

c. If the inflation rate last year was 4 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Total real rate of return             %

Reference no: EM131328841

Questions Cloud

What is the bond duration : (Assume the 11% is compounded semi-annually, not continuously) A five year bond with a yield of 11% pays an 8% coupon at the end of each year.  What is the bond's duration? Use the duration to calculate the effect on the bond’s price of a 0.2% decrea..
Examination and analysis of the company products : Based upon your examination and analysis of the company's products, provide an example of each of the following: a product that is in the introduction stage of the product life cycle, a product that is in the growth stage, a product that is in the..
What is the most unusual characteristic among them : What common elements do you find among the job descriptions? What is the most unusual characteristic among them?
From given information estimate the beta of simon stock : The return on Simon Entertainment stock in the past eight months has been as follows: 8%, 4%, 16%, -10%, 26%, 22%, 1%, -55%. From this information, estimate the beta of Simon stock.
Bought bond with an annual coupon rate : Suppose you bought a bond with an annual coupon rate of 8 percent one year ago for $903. The bond sells for $938 today. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? If the inflation rate last ..
What is the expected return on a stock : The expected return on the market portfolio equals 12%. The current risk-free rate is 6%. What is the expected return on a stock with a beta of 0.66?
Describe some of the issues with not having an industry : Describe some of the issues with not having an industry-wide standard price for a medicine. Should not-for-profit organizations be held accountable for medicine valuations? Why or why not?
What is the expected return on the market portfolio : If the risk-free rate equals 4% and a stock with a beta of 0.75 has an expected return of 10%, what is the expected return on the market portfolio?
Define required wattage for a ups for the following system : Search the Web for a UPS that provides the wattage necessary to run the systems listed above for at least 15 minutes during a power outage.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the equivalent uniform annual cost

A piece of equipment costs $1200 and has a salvage value of $400 at the end of its 3 year life. Maintenance costs are $200 for the first year and increase $50 per year to the end of it's 3 year useful life. The company has an MARR of 6%. What is the ..

  What is the approximate real rate of interest

Treasury bills are currently paying 5 percent and the inflation rate is 2.5 percent. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate % What is the exact r..

  What is the receivables turnover

Evil Pop, Inc., has an average collection period of 27 days. Its average daily investment in receivables is $43,300. Assume 365 days per year. What is the receivables turnover?

  What is profit or loss if the underlying stock at expiration

You buy a put with an exercise price of $75 for $5 and a call with an exercise price of $75 for $5, what is your profit or loss if the underlying stock at expiration is selling at $65? A writer sells a put with a strike price of $70 for $3, what is h..

  Identify the arbitrage opportunity open to a trader

A European call option and put option on a stock both have a strike price of $20 and an expiration date in 3 months. - Identify the arbitrage opportunity open to a trader.

  Rate of return does investor expect to receive on stocks

Silver coin corp.'s preferred stock is currently selling for $67. The company pays $8 annual dividends on this preferred stock. Which rate of return does the investor expect to receive on this stock if the stock is purchased today?

  Allowable payback and discounted payback statistic

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 12 percent, and that the maximum allowable payback and discounted payba..

  Common valuation multiple is the price-earnings ratio

The most common valuation multiple is the price-earnings ratio. You should be willing to pay proportionally more for a stock with lower current earnings. A firm's price-earnings ratio is equal to the share price divided by its earnings per share.

  What per-visit price must be set for service to break even

Assume that the managers of Fort Winston Hospital are setting the price on a new outpatient service. Here are relevant data estimates.

  Calculate accrued interest due to the seller from the buyer

On October 5, 2015, you purchase a 11,000 T-note that matures on august 15,2027 (settlement occurs two days after purchase, so you receive actual ownership of the bond on October 7, 2015) the coupon rate on the t-note is 4.391 percent and the current..

  What is the impact of the higher savings

What is the impact of the higher interest rate of 7% on the Sampsons' accumulated savings?- What is the impact of the higher savings of $4,800 on their accumulated savings?

  External sources to fund the expected growth

Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $7.2 million. The firm also has a profit margin of 30 percent, a retention ratio of 20 percent, and expects sales of $8.2 million next..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd