1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
MrMuchimi
3 years ago
5

You buy a seven-year bond that has a 5.25% current yield and a 5.25% coupon (paid annually). In one year, promised yields to mat

urity have risen to 6.25%. What is your holding-period return
Business
1 answer:
Rufina [12.5K]3 years ago
5 0

Answer:

HPR = 0.371%

Explanation:

we must first determine the price of the bond in 1 year:

present value of face value = $1,000 / (1 + 6.25%)⁶ = $695.07

present value of coupon payments = $52.50 x 4.87894 (PV annuity factor, 6.25%, 6 periods) = $256.14

market price in 1 year = $951.21

since you bought the bond at face value (market value = YTM), the the holding period return is:

HPR = [(ending price - actual price) + dividends received] / actual price

HPR = [($951.21 - $1,000) + $52.50] / $1,000 = $3.71 / $1,000 = 0.371%

You might be interested in
How are fixed costs different from variable costs?
Alekssandra [29.7K]

Answer:

How are fixed costs different from variable costs?Fixed costs do not change no matter how much a business produces; variable costs do change.

Explanation:

when a company decides to produce a  certain commodity fixed cost and variable costs are the main costs of  the company. Fixed costs are constant regardless of the amount of output a company produces . e.g insurance and  rental payment while Variable cost changes or varies  or with the amount of goods and services  produced by a company.e.g money paid for labour.

6 0
3 years ago
Read 2 more answers
Because poor people areless likely to have __________ adequate healthcare, guaranteeing everyone in society the best healthcare
11Alexandr11 [23.1K]

Answer:

attached

Explanation:

3 0
3 years ago
Read 2 more answers
If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in
Usimov [2.4K]
The owner has $2,000 more in assets. therefor the equity increased by 2,000
6 0
3 years ago
Why i s visionary management important
tatuchka [14]
So u kan axtualy see and grasp whats going on and what u doing
6 0
3 years ago
Read 2 more answers
When a country allows trade and becomes an importer of jet skis,
Delvig [45]
The best answer for this question would be:

<span>b. domestic producers of jet skis are worse off, domestic consumers of jet skis are better off, and the economic well-being of the country rises.

Because originally the jet skis came from the country they originated from so the quality is original and more trusted to the consumers. </span>
7 0
3 years ago
Other questions:
  • Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree.
    10·1 answer
  • Calvin knew his small local hardware store could not compete on price with the big-box discounters so he began offering classes
    13·1 answer
  • The general ledger of Red Storm Cleaners has the following summary of the transactions for the year:
    9·1 answer
  • How might you measure service quality in a​ hotel? A. Any unserviceable item in the room​ (light, TV,​ radio, mini-bar,​ etc.) B
    7·2 answers
  • The forces that affect foreign markets may differ dramatically from those affecting domestic markets. This makes a careful------
    12·1 answer
  • Given the following information for the year ended December 31, what is the ratio of cash to monthly cash expenses? Negative cas
    12·1 answer
  • Moss exchanges a warehouse for a building he will use as an office building. The adjusted basis of the warehouse is $ 600,000 an
    15·1 answer
  • What is the need of entrepreneurship​
    8·1 answer
  • what term describes the conscious, systematic process of making decisions about goals and activities that an individual, group,
    5·1 answer
  • Mr. Liu turns 65 on June 19. He has never previously qualified for Medicare so his first Medicare eligibility date will be by Ju
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!