Question

Three years ago, English and Co. issued 30-year 6% coupon bonds. At the time of issuance, the yield to maturity was 6% per year and the bonds sold at face value. The bonds are currently selling at $93.675 per $100 of face value. Assuming the coupon is paid semi-annually, what is the current yield to maturity? Suppose you purchased these bonds one year after they were issued when they were priced to yield 6.25%. What has been your annualized rate of return on your investment? If you lack sufficient time to determine a numerical answer explain in detail the approach you would use to determine the investment's realized rate of return.

Answer 1

The annualized rate of return on the investment= -1.04% p.a

Step-by-step explanation:

Please see attachment