One year ago you bought a 5-year 8% coupon bond that will pay $1,000 at...
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Accounting
One year ago you bought a 5-year 8% coupon bond that will pay $1,000 at maturity (its par value). The bond was priced at $924.18 to yield 10% and pays interest annually at the end of each year. Now, one year later, (after the first interest payment), the bond is priced to yield 9%.
What is the new price if you decide to sell now? (5 points)
What was your holding period return for the one year? (5 points)
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