What is your one year rate of return on this investment

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1. You purchase a 15 year bond today at a YTM of 6.7% for $1,000. What is your 1-year rate of return if you sell the bond a year later at a YTM of 10%?

2. You buy a bond that promises to pay you $4,000 forever. If interest rates are 10%, what is the most you should pay for the bond? Answer to 2 decimal places, for example 143.15

3. You buy a 13 year, 9% bond when it has a current yield of 8%. 1 year later, you sell the bond at a YTM of 12%. What is your 1 year rate of return on this investment? Answer to 4 decimal places, for example 0.1974.

Reference no: EM131851667

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