What is the total rate of return on the bond

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Reference no: EM131990609

You want to buy a Disney bond with three years until maturity and a coupon rate of 8.75% per year, paid semiannually. FED reports that the market interest rate for similar bonds is only 3.5% per half-year.

a. Find the bond's price today and 6 months from now after the next coupon is paid. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Current price $ Price after 6 months $

b. What is the total rate of return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM131990609

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