Which bond offers the higher expected return over the six

Reference no: EM13281700

A 30 year maturity bond (Bond A) has a 7% coupon rate paid semiannually. It sells today for $867.42. A 20 year maturity bond (Bond B) has a 6.5% coupon rate, also paid semiannually. It sells today for $879.50. A bond market analyst forecasts that in six months, the first bond will sell at yield to maturity of 8% and that the second bondwill sell at yield of 7.5%. Which bond offers the higher expected return over the six? month investment period?

Reference no: EM13281700

Questions Cloud

Determine seduak optimal capital structure : Seduak has estimated the costs of debt and equity capital for various proportions of debt in its capital structure.

Define a certain reaction has an activation energy : A certain reaction has an activation energy of 61.0 kJ/mol and a frequency factor of A1 = 2.00×10^12M^-1s^-1. What is the rate constant, k, of this reaction at 29.0 degrees celsius

Ultimately responsible for compliance in an organization : Who is ultimately responsible for compliance in an organization? Businesses are now forced to demonstrate diligence on regulatory issues and one way they do this is through training programs. In your discussion response please address the follo..

Explain why are differential inputs used in electronics : For pulse oximeter signals for heart rates less than 240 beatsper minute, what do you expect will be the important spectral andother signal characteristics that need to be preserved in an electronic system.

Which bond offers the higher expected return over the six : Which bond offers the higher expected return over the six? month investment period?

Explain the reflecting light have a wavelength greater : A light of 655 nm is shone onto a metal surface and transfers some of its momentum to the metal. Will the reflecting light have a wavelength greater or less than 655

Find the size of the acceleration of gravity on that planet : On planet Zog, Mr. Spock measures that it takes 1.47 s for a mass of 0.50 kg to hit the ground when released from rest from a height of 2.85 m. Calculate the size of the acceleration of gravity on that planet

Is there an arbitrage opportunity : If yes, state very carefully which asset you will buy, which you will sell, and how much (in what proportion).

The dispense 450 microliters of buffer using a micropipette : Into how many tubes can you dispense 450microliters of buffer using a micropipette set at 2.5 microliters

User Account

All Pages