User Account

All Pages

What is the HPY on your investment

Assignment Help Financial Management
Reference no: EM131963471

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 8 percent for $1,030. The bond has 17 years to maturity. What rate of return do you expect to earn on your investment? Assume a par value of $1,000. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected rate of return %

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? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Bond price $   

b2. What is the HPY on your investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

HPY %

Reference no: EM131963471

Questions Cloud

Develop a strong ethos- ethical persona to win over audience : Develop a strong ethos - ethical persona - to win over your audience (Goshgarian & Krueger 138-140). Anticipate counter arguments against your proposal.
How do portrayals of disorders in popular culture differ : Obsessive-compulsive and related disorders (e.g., hoarding disorder) have gained popularity in the media in recent years. How do portrayals of these disorders.
How does the work demonstrate a visual artists social role : How does the work demonstrate a visual artist's social role today? How does the use of references to earlier periods from the history of art contribute?
Why medication alone is not as effective as psychotherapy : Write a 1,200- word essay about your findings on why medication alone is not as effective as psychotherapy in combination with medication for treating anxiety.
What is the HPY on your investment : What rate of return do you expect to earn on your investment? What is the HPY on your investment?
Which attributes seem to matter the most : Which attributes seem to matter the most? How do you know it? Discuss their importance and/or effect sizes. How can you interpret the results of the models?
Write review on article - integration of the internet : Write review on this article - The best way to avoid attacks from hackers from keylogging is to ensure robust encryption and monitoring of the network
Explain the experience participating in the activity : Explain the experience participating in the activity. This section is personal and can include what thoughts concerning the activity.
Find the probability that the sample proportion : Find the probability that the sample proportion will be at least 0.30. Give answer to 4 decimal places.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the geometric mean annual return for your investment

Suppose that you had invested $1,000 initially. What is the geometric mean annual return for your investment?

  Recovery amount attributable to net working capital

Keyser Mining is considering a project that will require the purchase of $980,000 in new equipment. The equipment is in a seven-year MACRS class. The equipment can be scrapped at the end of the project for 5 percent of its original cost. What is the ..

  Company will maintain this dividend

A company pays a constant $20 dividend on its stock. The company will maintain this dividend for the next 15 years and will then cease paying dividends forever. What is the current price per share if the required return on this stock is 11 percent? S..

  Did the equipment purchase prove to be desirable

At the end of 8 years, the equipment was sold for S 40 000 Assuming interest at 8%, did the equipment purchase prove to be desirable?

  The return on the stock account is expected

You are planning to save for retirement over the next 15 years. To do this, you will invest $1,100 a month in a stock account and $500 a month in a bond account. The return on the stock account is expected to be 7%, and the bond account will pay 4 %...

  What growth rate of earnings would you forecast for DFB

DFB, Inc. expects earnings this year of $5.16 per share, and plans to pay a $3.30 dividend to shareholders. DFB will retain $1.86 per share of its earnings to reinvest in projects that have an expected return of 14.8% per year. What growth rate of ea..

  About the rates of return

At what annual rate did the coin appreciate from its first minting to the 1972 sale? What annual rate did the 1972 buyer earn on his purchase?

  What are the depreciation deductions for years

What is the tax basis for the equipment? What are the depreciation deductions for years 1, 2, and 3?

  Expanding rapidly-currently needs to retain all of eaarnings

Nonconstant growth Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $1.25 comin..

  Firm earnings per share are expected

Assume that a firm's earnings per share (EPS) are expected to be $ 2.29 next year

  Compute the yield to maturity on old issue

Compute the yield to maturity on the old issue and use this as the yield for the new issue.

  How much should the lease payments

If the Hardaway Corporation desires a return of 12 percent on its investment, how much should the lease payments 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