What is the realized yield of investment

Assignment Help Finance Basics
Reference no: EM132660507

Assume the current 10-year yield is 1%. All yields are BEYs.

a) Imagine you just bought a 1% coupon ten-year T-bond, how much you have paid for it? Assume a par of $100. The 1% coupon is paid semi-annually.

b) You plan to hold the bond for ONE year. Assume the yield stays at 1% during the year but goes up to 2.5% the minute before you sell the bond at the end of the year. Compute the total dollar return and its three components (coupon interest, interest on interest, capital gain or loss) for your investment. What is the realized yield (BEY) of your investment?

Reference no: EM132660507

Questions Cloud

Evaluate key business activities of engineering organisation : Evaluate the key business activities of an engineering organisation and the trade considerations which together combine to influence the competitiveness
Calculate the company break-even point in unit sales : Mauro Products distributes a single product, a woven basket whose selling price is $22 per unit and whose variable expense is $20 per unit. The company's monthl
Describe the factors to consider when doing a swot analysis : Describe what you found in relating the two different SWOT analyses (e.g., what things were addressed, what new environmental factors came up, and so forth).
What is Elliot qualified business income deduction : Elliot's wife, Julie, is an attorney who works for a local law firm and receives wages of $90,000. What is Elliot's qualified business income deduction
What is the realized yield of investment : You plan to hold the bond for ONE year. Assume the yield stays at 1% during the year but goes up to 2.5% the minute before you sell the bond
What is Ting qualified business income deduction : Ting is a CPA and a single taxpayer using the standard deduction. What is Ting qualified business income deduction
What is Susan qualified business income deductions : Susan has no other items of income or loss and will take the standard deduction. What is Susan's qualified business income deduction
Discuss the atos test case litigation program : Discuss the ATOs Test Case Litigation Program - Alice will receive a salary of $25,000 for the management of the shop, as well as superannuation contributions
What is her qualified business income deduction : Tammy, a single taxpayer, has a part-time job at BigCo, a company in which she has no ownership interest. What is her qualified business income deduction

Reviews

Write a Review

Finance Basics Questions & Answers

  How your interest payments changes over time

Create an Excel spreadsheet and calculate how your interest payments, principal payments, and the outstanding loan balance changes over time.

  How many different combinations of outfits could he take

He is going on a business trip and needs to take two of each. How many different combinations of outfits could he take?

  Determine whether to buy or sell futures when hedging

What is the price sensitivity hedge ratio? How are the price sensitivity and minimum variance hedge ratios alike? How do they differ?

  How much cash will be needed to pay the dividend

How much cash will be needed to pay the dividend?

  Expected rate of return on the investment

If the expected rate of return on the investment is 12%, and the hospital invests at the end of each year?

  Suppose the interest rate r is constant given s0 find the

suppose the interest rate r is constant. given s0 find the price s1 of the stock after one day such that the marking

  Calculating the number of periods using given information

Calculating the Number of Periods. You're trying to save to buy a new dollar 150,000 Ferrari. You have dollar 35,000 today that can be invested at your bank.

  What will be your portfolio strategy

The Stock-Trak project requires each student to manage a $1 million portfolio. With a 50% margin, this gives each student buying power of $2 million.

  After tax cost of debt

What would be a fair value for shares of CODA given a 50% Debt to Cap ratio, a 3% after tax cost of debt and a 6% cost of equity?

  How much money would you need to invest

You have your choice of two investment accounts. Investment A is a 12-year annuity that features end-of-month $1,300 payments and has an interest rate of 7.1.

  Which of the long-term debts above were issued at face value

Which of the long-term debts above were issued at face value (i.e., sold at par)?

  Determine the value of a share

A company has an expected dividend next year of $1.20 each share, a zero growth rate of dividends, and a required return of 10%. The value of a share of the company's common stock;

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