What is the holding period yield on your investment

Assignment Help Financial Management
Reference no: EM131859421

The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY).

a. Suppose that today you buy a bond with an annual coupon of 11 percent for $1,130. The bond has 18 years to maturity. What rate of return do you expect to earn on your investment? Assume a par value of $1,000.

b1. Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. What price will your bond sell for?

b2. What is the HPY on your investment?

Reference no: EM131859421

Questions Cloud

Calculate bruno acquisition cost for this effort : Calculate and label the level one and level two acquisition rates. Calculate Bruno’s acquisition cost for this effort.
Annual market share of the acme widget company : calculate the annual market share of the Acme Widget Company for each year.
Market demand for the product can be low or high : You are evaluating a product. The market demand for the product can be low or high.
Prepare the journal entries for the date of the purchase : Prepare the journal entries for the date of the purchase, December 31, 2016 to the date of payment.
What is the holding period yield on your investment : The bond has 18 years to maturity. What rate of return do you expect to earn on your investment? What is the HPY on your investment?
Compound interest-future value and present value conpects : Financial managers need an understanding of compound interest, annuities, future value and present value concepts.
What is the firm breakeven point in sales volume : what is the firm’s breakeven point in sales volume?
What is the annual deposit for the next two years : You are working part-time and planning a holiday which requires $5,000 for flights and accommodation in 2 years. What is the annual deposit for the next 2 years
Weighted average cost of capital to evaluate all investments : Why would a firm not use its weighted average cost of capital (WACC) to evaluate all proposed investments?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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