What is the expected rate of return of the following bonds? Par value: $1,000 ...
What is the expected rate of return of the following bonds?
Par value: $1,000
Years to maturity: 10 years
Coupon rate: 8% paid semiannually
Current market price: $960
Select one:
a. 8.22%
b. 8.61%*
c. 9%
d. 9.43%
Homework Answers
Expected rate of return is calculated using the RATE function as follows:-
=RATE(nper,pmt,pv,fv)
=RATE(10*2,8%/2*1000,-960,1000)*2
=8.61%
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What is the expected rate of return of the following bonds?
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