Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a 10-year, $1,000 par value bond has a 6.75% coupo

A 10-year, $1,000 par value bond has a 6.75% coupon rate with interest paid semiannually. The...

Free

70.2K

Verified Solution

Question

Finance

A 10-year, $1,000 par value bond has a 6.75% coupon rate withinterest paid semiannually. The bond currently sells for $850. Whatis the capital gains yield on these bonds? Enter your answerrounded to two decimal places. Do not enter % in the answer box.For example, if your answer is 0.12345 or 12.345% then enter as12.35 in the answer box.

Answer & Explanation Solved by verified expert
3.6 Ratings (314 Votes)

Capital Gains Yield= Current price-original price/Original price*100

                                    = $850 – $1,000/ $1,000*100

                                    = $150/ $1,000*100

                                    = 0.15*100

                                    = 15.

Therefore, the capital gains yield is 15.

In case of any query, kindly comment on the solution.
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

A 10-year, $1,000 par value bond has a 6.75% coupon rate withinterest paid semiannually. The bond currently sells for $850. Whatis the capital gains yield on these bonds? Enter your answerrounded to two decimal places. Do not enter % in the answer box.For example, if your answer is 0.12345 or 12.345% then enter as12.35 in the answer box.

Other questions asked by students

Accounting
1.2K views

Cost of Units Completed and in ProcessThe charges to Work in Process—Assembly Department for...

Psychology
1.2K views

What is the impact of globalization on US manufacturing and service sectors? What are the positive...

Geometry
1.2K views

Find the work done by a force of 1 newton acting in the direction of...

Basic Math
1.2K views

Same-sex marriage: In a recent ABC News/Washington Post poll, 1,016 adults nationwide answered thequestion, "Overall,...

Algebra
1.2K views

What is the 2 decimal z value for an x value of 20 if the...

Accounting
1.2K views

What is the difference between a bank balance and an adjusted bank balance?

Accounting
1.2K views

please answer the question in the picture On...

Accounting
1.2K views

Below is a list of various expenditures that an organization could make. In the columns...

Accounting
1.2K views

Culver Clocks, Inc. uses the LIFO method of valuing inventory. Over the past year, it...

Finance
1.2K views

Suppose you plot an investment opportunity set between two stocks. In the special case in...

Finance
1.2K views

CCR stock is currently trading for $72.42 per share. The firm is expected to pay...

Accounting
1.2K views

Gauch Corporation ts conducting a time-driven actvity-based costing study in its Customer Support Department. The...