Bonds : Yield Capital Gain/Loss
Suppose you have a bond, with a par value of $1000, that pays interest twice a year at the rate of 12%. You paid $853.29 when you purchased this bond
a) Calculate the interest rate yield of your bond.
b) You are selling this bond today and will receive $ 936.33 for it. What is the capital gain/loss?
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Solution Preview
a) Calculate the interest rate yield of your bond
payment = $1000 * 12% / 2 = $60 each period
Cost ...
Solution Summary
Interest rate and capital gain/loss are investigated.
$2.19