Explore BrainMass

# Return on bonds

Not what you're looking for? Search our solutions OR ask your own Custom question.

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

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. The current yield on a \$5,000, 8 percent coupon bond selling for \$4,000 is

Â© BrainMass Inc. brainmass.com March 4, 2021, 6:24 pm ad1c9bdddf
https://brainmass.com/economics/bonds/return-bonds-43188

#### Solution Preview

1. What is the return on a 5 percent coupon bond that initially sells for \$1,000 and sells for \$900 next year?

Selling price= \$900
Coupon payment = \$50 =5%*1000
Amount realized= \$950 =900+50
Initial investment= \$1,000
Therefore return on ...

#### Solution Summary

The solution calculates returns on investment in bonds, coupon payment every year and the current yield.

\$2.49