Using the bond below, calculate your annual holding period yield (on a bond equivalent basis). Holding...

Using the bond below, calculate your annual holding period yield (on a bond equivalent basis).

Holding period yield (HPY)
Last coupon date pre-purchase	7/15/2016
First coupon date post-purchase	1/15/2017
Purchase price (clean)	90.000
Purchase (settlement) date	10/1/2016
Sale price (clean)	92.000
Sale date	2/10/2022
Coupon rate	5.00%
Coupon	Semi-annual
Convention	30/360

3.096%
5.888%
6.192%
6.246%
6.288%

Expert Solution

Oct 1.2016	Purchase
15-Jan-17	1st coupon	31+30+31+15=	107
Jul-17	1	5 yrs.
Jan-18	2
Jul-18	3
Jan-19	4
Jul-19	5
Jan-20	6
Jul-20	7
Jan-21	8
Jul-21	9
Jan-22	10
Feb 10,2022		16+10=	26
			133

Assuming a $ 100 Face value bond,
1.Purchase price (without accrued interest)			-90
Coupon Interest receipts for
Oct.1 2016 to Jan 15,2017(105 days)	1005%107/360	1.46
Jan 15, 2017--Jan 22 2022(10 semiannual coupon periods)	1005%/210=	25.00
Jan 16,2022--Feb 10, 2022(26 days)	1005%26/360	0.36
2.Total interest reciepts			26.82
3.Sale price (without accrued interest)			92
4.Net holding period gain(1+2+3)			28.82
Gain % (28.82/90)------------ (4/1)			32.02%
for a total of 5 yrs. & (133/360) days (ie. 5.36944 yrs.)
Holding period Yield/ Year			5.96%
Nearest Option ANSWER: 5.89%

jeff jeffy answered 4 months ago

Calculate Holding period yield – A bond is purchased at $1,200 and pays a $120 annual...

Calculate Holding period yield – A bond is purchased at $1,200 and pays a $120 annual payment with maturity in 7 years. The buyer has to sell the bond after 3 years and rates are now 7%. What is the price the bond sells at? What is the holding period yield? Do not use Excel!

Calculate the bond equivalent yield and effective annual return on fed funds that are 3 days...

Calculate the bond equivalent yield and effective annual return on fed funds that are 3 days from maturity and have a quoted nominal yield of 6.56%.

Calculate the bond equivalent yield and effective annual return on fed funds that are 29 days...

Calculate the bond equivalent yield and effective annual return on fed funds that are 29 days from maturity and have a quoted yield of 0.26 percent. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 4 decimal places.

Calculate the bond equivalent yield and effective annual return on fed funds that are 11 days...

Calculate the bond equivalent yield and effective annual return on fed funds that are 11 days from maturity and have a quoted yield of 0.35 percent.

What is the discount yield, bond equivalent yield, and effective annual return on a $5 million...

What is the discount yield, bond equivalent yield, and effective annual return on a $5 million commercial paper issue that currently sells at 98.625 percent of its face value and is 136 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Discount yield _____ % Bond equivalent yield ______ % Effective annual...

1. What is the discount yield, bond equivalent yield, and effective annual return on a $1...

1. What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 97 3/8 percent of its face value and is 55 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Discount yield % Bond equivalent yield % Effective annual return % ...

What is the discount yield, bond equivalent yield, and effective annual return on a $1 million...

What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 97.375 percent of its face value and is 75 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

1-What is the discount yield, bond equivalent yield, and effective annual return on a $1 million...

1-What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 96.375 percent of its face value and is 65 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Discount yield...% Bond equivalent yield...% Effective annual return...% 2-What is the discount yield,...

Assuming a semi-annual interest payment, determine both the bond-equivalent and annual effective annual yield

Assuming a semi-annual interest payment, determine both the bond-equivalent and annual effective annual yield (to two significant digits) of a bond whose current price is $972, a coupon rate of 7%, a face value of $1000 and with a maturity of 15 years.

What is the holding period return (Capital gain) of a 9% annual coupon bond with a...

What is the holding period return (Capital gain) of a 9% annual coupon bond with a face value of $1000 and with five years to maturity if it is purchased at the beginning of year 1 at a Yield-to-Maturity (market rate) of 6.0% and sold at the beginning of year 2? Assume that rates do not change. 7.4% 7.1% 6.8% 6.0%

Question