4. Gentrex has just sold bonds that are currently trading at $905.52. The bonds have...
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4. Gentrex has just sold bonds that are currently trading at $905.52. The bonds
have 15 years before they mature, $1,000 par value and 12% annual coupons.
(a) On the basis of the above information, the yield to maturity should be?
(b) What would be the return on your investment in the bond if you bought it
when it was rst issued, held it for one year and then sold it when yields fell to
10.8%? What is the rate of capital gain and the current yield?
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