What is the rate of return for an investor who pays $1,054.47 for a three-year bond with a 7% coupon ansd sells the bond one yearlater for $1,037.19?

DofotheroU

DofotheroU

Answered question

2021-01-05

What is the rate of return for an investor who pays $1,054.47 for a three-year bond with a 7% coupon ansd sells the bond one yearlater for $1,037.19?

Answer & Explanation

mhalmantus

mhalmantus

Skilled2021-01-06Added 105 answers

Rate of Return =expectedactualtotal expected
Rate of Return =(.07$1,054.47)($1,054.471,037.19)total expected
Rate of Return =$73.81$17.28$73.81+$1,054.47
Rate of Return =$73.81$17.28$1,128.28
Rate of Return =$56.53$1,128.28
Rate of Return= .050
Rate of Return = 5%

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