Question 1 14 Points You Bought A 12 Coupon Bond One Year Ago For 1150 The Bond Has A Face Value Of 1000 Makes An 1 (32.39 KiB) Viewed 83 times
Question 1 (14 points) You bought a 12% coupon bond one year ago for $1150. The bond has a face value of $1000, makes annual coupon payment and matures three years from now. Suppose you decide to sell your bond today and the YTM now is 8.6%. What is your total dollar return? (6 points)
b. What is your total percentage return? (4 points)
c. If inflation rate was 1.8%, what is your total real percentage return? (4 points)
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