102k views
4 votes
Suppose you bought a bond with a coupon rate of 5.2 percent paid annually one year ago for $920. The bond sells for $970 today. a.Assuming a $1,000 face value, what was your total dollar return on this investment over the past year

User Nelsi
by
5.2k points

1 Answer

1 vote

Answer:

$102

Step-by-step explanation:

Calculation to determine what was your total dollar return on this investment over the past year

Using this formula

Total dollar return =Change in price + Coupon payment

Let plug in the formula

Total dollar return = $970 - $920 + (5.2÷100*$1000)

Total dollar return = $970 - $920+$52

Total dollar return=$102

Therefore what was your total dollar return on this investment over the past year is $102

User Locane
by
3.6k points