A man buys a corporate bond from a bond brokerage house for $925. The bond has a face value of $1000 and pays 4 percent of its face value each year. If the bond will be paid off at the end of 10 years, what rate of return will the main receive?

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Vaishali YadavLv10

21 Jan 2021

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Related questions

Bond value-
You own a 20 year ,1000 par value bond paying 8 percent interest annually.The market price of the bond is $925 and your required rate is 10 percent.
What is the Expected return rate of the 20 year bond paying 8 percent if its price is $925?.
Determine the value of the bond to you given your return rate
Should you sell the bond or continue to own it?

turquoisemuskrat238

1. You have a ten year bond that you purchased for $1000, it has a face value of $1000 and a coupon rate of 10% a. What is the yield to maturity? b. Is it selling for face value or at a discount or at a premium? 2. One year later you want to sell the bond in number 1. The market yield for that type of bond is now 13%. a. What will happen to the price of that bond? Will it go up or down? b. Is it selling for face value or at a discount or at a premium? 3. What is a zero coupon bond? Explain how investors get their return 4. What is difference between Muni Bonds and Corporate Bonds? 5. What is a general obligation bond? A revenue bond? 6. There is a bond that pays a 12% coupon, has three years left to maturity, a face value of $1,000 and market yields are 10%. What is the price this bond should sell for? What is the current yield? 7. A two year bond that yields 10% has a coupon rate of 10% a. What is the price this bond will sell for? (Hint you do not need to do any math here) b. What is the dollar value of the coupon that is paid? c. What is the price it should pay for if the market yields now drop to 8%?

A corporate bond with a face value of $1000 and a coupon rate of 5% has only 4 years remaining to maturity. Because of its credit rating, this bond has a yield of 6.5%. The rating agencies just upgraded the bond, and as a result its discount rate fell to 6%. What will be the change in the price of this bond?

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