YTM/YTC/HPR
Not what you're looking for?
On November 1, 2009 you purchased two callable bonds with 6 years remaining to maturity at the time of purchase and 3 years to remaining to call. The coupon interest rate of both bonds is 10% and par value is $1,000. The first bond pays annual coupon and the second - semi-annual. At the time you purchased the bond, the annual-coupon bond had the price of 1,092.50 and the semi-annual bond had price of 1,085.
You sold both bonds on November 1, 2010, right after receiving the coupon payments. At this time the annual bond's yield has become 7% and the semi-annual's bond price changed to 7.2%.
a) What was the yield to maturity for both bonds on November 1, 2009?
b) What was the yield to call for both bonds on November 1, 2009?
c) At what price did you sell each bond on November 1, 2010?
d) What was your holding period return for each bond? Assume coupon reinvestment at 10% annual return
Purchase this Solution
Solution Summary
The solution explains how to calculate the yield to maturity, yield to call and holding period return
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Introduction to Finance
This quiz test introductory finance topics.
Motivation
This tests some key elements of major motivation theories.
Basics of corporate finance
These questions will test you on your knowledge of finance.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)