What is the hpy on your investment

Assignment Help Finance Basics
Reference no: EM132503904

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 an annual coupon bond with a coupon rate of 6 percent for $915. The bond has 10 years to maturity and a par value of $1,000. What rate of return do you expect to earn on your investment?

b-1. Two years from now, the YTM on your bond has declined by one percentage point, and you decide to sell. What price will your bond sell for?

b-2. What is the HPY on your investment?

Reference no: EM132503904

Questions Cloud

What is the value of the ending inventory : Selling prices are: X $2 per unit, Y $4 per unit, and Z valueless. The ending inventory of X is 84 units. What is the value of the ending inventory
Briefly discuss timothy and janet respective : Briefly discuss Timothy and Janet's respective motivations for timing their purchase the way they did. Assuming all other factors remain unchanged
Describe relationships among activities and outcomes : Journaling provides a valuable tool for recording, reflecting on, and reviewing your learning. This approach provides an opportunity for you.
How a company should evaluate the decision : 1. Describe how a company should evaluate the decision in a and b below:
What is the hpy on your investment : 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 realize
Calculate the weekly non-cash taxable benefit : An Ontario employer pays 50% of their employees' monthly group term life insurance premium. Calculate the weekly non-cash taxable benefit
How you would disseminate the results of your project : Explain how you would disseminate the results of your project to an audience. Provide a rationale for why you selected this dissemination strategy.
What is the asked price of bond in dollars : In the above table, find the Treasury bond that matures in May 2036. What is the asked price of this bond in dollars?
Compute present value of the bids : A surface that costs $5.25 per square yard to install. This surface will have to be replaced at the end of 5 years. Compute present value of the bids

Reviews

Write a Review

Finance Basics Questions & Answers

  Recommendation to pay for children education

"Tom and Betty have AGI of $150,000 and have not planned for their children s education. Their children are ages 18 and 17 and the parents anticipate paying $20,000 per year, per child for education expenses. Which of the following is the most app..

  Ci for her expected proportion of the vote

If, based on a sample size of 200, a political candidate found that 125 people would vote for her in a two-person race.

  A study is conducted to compare the length of time between

a study is conducted to compare the length of time between men and women to assemble a certain product. past experience

  Calculating the investment worth for the next six years

Calculating the investment worth for the next six years and wants to invest equally amounts at the end of each year

  What is the break even point in pairs of shoes

The average selling price of shoes is $95 per pair. The variable cost is $55. The company incurs fixed cost is $160,00 per year.

  Find the breakeven point for solutions plus that is how low

keep your response between 2 and 3 pages double-spaced in length....not including the associated linear program and

  What is the total amount of assets invested in a nike and b

key comparative figures millions for bothnbspnikeandnbspreebokfollowkey figuresnikereebokfinancing liabilities

  Cost of capital for bank overdraft

What is the cost of capital for bank overdraft (kbo). The overdraft rate is 7.6 % pa compounded 12 times a year? Answer as a percentage to two decimal places.

  Discuss the pros and cons of the given strategy

With short-term interest rates near 0 percent in early 2014, and still very very low historically today, suppose the Treasury decided to replace maturing notes.

  Gold standard and foreign exchange markets summary

You've been asked by the local college to write down a lecture that explains the gold standard and addresses the functions of the world's major foreign exchange markets. Write down a summary detailing the functions of world's major foreign currenc..

  What do we mean by the term expected value

1. What do we mean by the term "Expected Value"? Please give an example. 2. Can an expected value have decimal points? Do we need to always round the expected values to the nearest integer?

  How the cost of the project is related to its duration

They calculated a normal completion time of 53 days and a cost of £29,300 - or a crashed completion time of 40 days and a cost of £33,350. See how they got these results, and find how the cost of the project is related to its duration.

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