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You buy a bond with a par value of $1000 and a coupon rate of 8%...

You buy a bond with a par value of $1000 and a coupon rate of 8% with 18 coupons remaining. You hold the bond and receive 11 coupons. If the bond had a YTM of 8.2% when you bought it and 9.1% when you sold it, what was your annual holding period ROR?

Solutions

Expert Solution

Bond purchase price is $981.51

Bond sale price is $944.82

Hence, annual holding period ROR is 7.93%

jeff jeffy answered 10 months ago
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