User Account

All Pages

What is the annualized rate of return of your investment

Assignment Help Financial Management
Reference no: EM131497091

Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 5.7%. You hold the bond for five years before selling it. a. If the bond's yield to maturity is 5.7% when you sell it, what is the annualized rate of return of your investment? b. If the bond's yield to maturity is 6.7% when you sell? it, what is the annualized rate of return of your investment? c. If the? bond's yield to maturity is 4.7% when you sell it, what is the annualized rate of return of your investment? d. Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain.

a. If the bond's yield to maturity is 5.7% when you sell it, what is the annualized rate of return of your investment? The annualized rate of return of your investment is____ %. ?(Round to two decimal places.)

b. If the bond's yield to maturity is 6.7% when you sell? it, what is the annualized rate of return of your investment? The annualized rate of return of your investment is ____?%. ?(Round to two decimal places.)

c. If the bond's yield to maturity is 4.7% when you sell it, what is the annualized rate of return of your investment? Then the annualized rate of return of your investment is ___%. ?(Round to two decimal places.)

d. Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain.(Select the best choice below.) the best choice below.) A. Even though the yield to maturity changes, if there is no chance of default, then the bond is risk free. B. Even without default, if you sell prior to maturity, you are exposed to risk that the YTM may change. C. There is always a chance of default, so every bond has risk. D. If there is no chance of default, the investment is risk free no matter when you sell it.

Reference no: EM131497091

Questions Cloud

What is the present value of the stock price at time : The discount rate on WD stock is 10%. What is the present value of the stock price at time 4?
Premium bond making semiannual payments : Bond X is a premium bond making semiannual payments. What is the price of each bond today?
Currently pay dividends-what should the price of intel : Intel Inc. does not currently pay dividends; however, investors expect that in four years, the firm will pay its first dividend of $2.50 per share.
What is the target share price five years : YGTB, Inc., currently has an EPS of $1.60 and an earnings growth rate of 7 percent. If the benchmark PE ratio is 21, what is the target share price five years.
What is the annualized rate of return of your investment : Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 5.7%. what is the annualized rate of return of your investment?
Experiencing rapid growth-what is stock price : Navel County Choppers Inc. is experiencing rapid growth. If the dividend per share just paid was $1.69, what is the stock price?
Should elrond buy and install machine press : Project Analysis. Elrond’s Machine Shop is considering a four-year project to improve its production efficiency. should Elrond buy and install machine press?
What is the current dollar value of this contribution : What is the current dollar value of this contribution if the discount rate is 7%?
Company historical average pe as benchmark : Using the company’s historical average PE as a benchmark, what is the target stock price one year from today

Reviews

Write a Review

Financial Management Questions & Answers

  Current security prices reflect public-private information

Current security prices reflect all public and private information. This statement describes what form of the Efficient Market Hypothesis.

  Identify stakeholders affected by dick smith collapse

ACC5502 Accounting and Financial Management Assignment. Identify stakeholders affected by Dick Smith's collapse. State accounting equation at beginning of year

  Negative growth stock

Questions related to Negative growth stock

  Stock has an expected rate of return

A stock has an expected rate of return of 8.3% and a standard deviation of 6.4%. Which one of the following best describes the probability that this stock will lose 11% or more in any one given year?

  New model is introduced-sales of the existing model

Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $27,000, and the company expects to sell 1,550 per year. The company currently sells 2,050 units of its existing model per year..

  What is current stock price

The required rate of return on Groningen stock a 15%. What is the current stock price?

  Consistently predict either the direction of stock market

“No one can consistently predict either the direction of the stock market or the relative attractiveness of individual stocks and thus no one can consistently obtain better overall returns than the market. What are the weaknesses of this argument?

  What is the maximum dollar purchase you can make

You have $30,000 and decide to invest on margin. If the initial margin requirement is 60 percent, what is the maximum dollar purchase you can make?

  Calculate utility level investors obtain from portfoliors

The expected return on the S&P 500 index is 12%. The return on the T-bill is 5%. The standard deviation of return on the S&P 500 index is 18%. Investors can form portfolios from these 2 securities. Suppose investors have a utility function of the fol..

  What is net present value of project with cash flows

What is the net present value of a project with the following cash flows if the discount rate is 15 percent?

  Appliance for less is a local appliance store

Appliance for Less is a local appliance store. It costs this store $15.88 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 459 units. Each order costs $68. The company is usin..

  What will your annual loan payment be

Appalachian Bank offers you a $135,000, 5-year term loan at 6 percent annual interest. - What will your annual loan payment be?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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