Purchase Solution

Bonds: What is the realized yield on your investment?

Not what you're looking for?

Ask Custom Question

Suppose you buy a 7% coupon bond today for $960. The bond has a face value of $1,000, and has 18 years until maturity, and pays interest semi-annually. You hold the bond for five (5) years and then you decide to sell it. When you sell the bond the YTM has increased by 100 basis points (1%).

What is the realized yield on your investment?

Please also show:
PMT =
PV =
FV =
n =
i =

Purchase this Solution
Solution Summary

The expert examines the realized yield on an investment of bonds.

Purchase this Solution
Free BrainMass Quizzes
Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Motivation

This tests some key elements of major motivation theories.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

View More Free Quizzes
Related BrainMass Solutions

  • Yield to Maturity Comparison

    is the realized yield on your investment?

  • Finance Problem Sets - Bond Price Calulation

    What is the realized return on your investment? (7) ABC is a profitable firm that is not paying a dividend on its common stock with a required return of 10%. a.

  • Bond value, YTM, stock worth,growth rate, interest rate risk

    What is the realized return on your investment?

  • Bond questions

    The realized rate of return will be YTM of the investment, where the initial price is $1,000 and the final redemption amount is $1,090. The bonds were held for 6 years.

  • Various questions on bond valuation and yield

    The bonds are called at 9% premium or 1,090. The realized rate of return will be YTM of the investment, where the initial price is $1,000 and the final redemption amount is $1,090 and the years of holding is 6 years.

  • Default and Interest-Rate Risk

    After liquidating the firm, the bondholders receive a distribution of $150 per bond at the end of 3.5 years. What is the realized return on your investment? b.

  • after-tax yields

    On the other hand, the total expected yield is the increase in the market value of the investment plus the expected annual yield and dividend yield.  From the above investment analysis and comparison, the investment option with the highest after

  • Return on bonds

    43188 Return on bonds 1. What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $900 next year? 2. If a $12,000 coupon bond has a coupon rate of 8 percent, then the coupon payment every year is 3.

  • Bond and stock valuation

    After liquidating the firm, the bondholders receive a distribution of $150 per bond at the end of 3.5 years. What is the realized return on your investment? 2.

View More Related Solutions