What was baily rate of return for the six months

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Reference no: EM131868949

Lamar Baily purchased a 7 percent coupon corporate bond that matured in 10 years and paid interest semiannually. He paid $2,800 and six months later, immediately following an interest payment, he sold the bond. At the time of sale, the market interest rate on bonds of this type was 6 percent. What was Baily’s selling price? What was Baily’s rate of return for the six months? What is this return on an annual basis?

Reference no: EM131868949

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