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27 Nov 2018
LKD Co. has 13 percent coupon bonds with a YTM of 9.7 percent. The current yield on these bonds is 10.2 percent. How many years do these bonds have left until they mature? Bond Mature Years ?
Suppose you buy a 8.4 percent coupon bond today for $1,110. The bond has 8 years to maturity.
a. What rate of return do you expect to earn on your investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Rate of return %
b. Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What price will your bond sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Price $
LKD Co. has 13 percent coupon bonds with a YTM of 9.7 percent. The current yield on these bonds is 10.2 percent. How many years do these bonds have left until they mature? Bond Mature Years ?
| Suppose you buy a 8.4 percent coupon bond today for $1,110. The bond has 8 years to maturity. |
| a. | What rate of return do you expect to earn on your investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
| Rate of return | % |
| b. | Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What price will your bond sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
| Price | $ |
Reid WolffLv2
29 Nov 2018
