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In: Finance

You buy a bond with the following features: 9 years to maturity, face value of $1000,...

You buy a bond with the following features: 9 years to maturity, face value of $1000, coupon rate of 2% (annual coupons) and yield to maturity of 2.5%. Just after you purchase the bond, the yield to maturity rises to 4.9%. What is the capital gain or loss on your bond?

If the answer is a capital gain just enter the number. For example 581.65

If the answer is a capital loss enter a negative number. For example -841.47

Do not include the $ sign, just enter the number in dollars, rounded to the nearest cent (2 decimals).

Hint: capital gain / loss = value of the bond now - initial value of the bond.

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Expert Solution

jeff jeffy answered 2 months ago
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