P5000.00, 10-year, 8% bond that pays interest annually was purchased four years ago with a discount of P152.00. If the bond is sold today for P4750.00, determine a) the rate of return realized by the owner; (Ans. 7.8%) b) the rate of return realized by the purchaser if he holds on to the bond until maturity. (Ans. 9.1%)
P5000.00, 10-year, 8% bond that pays interest annually was purchased four years ago with a discount of P152.00. If the bond is sold today for P4750.00, determine a) the rate of return realized by the owner; (Ans. 7.8%) b) the rate of return realized by the purchaser if he holds on to the bond until maturity. (Ans. 9.1%)
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 5P
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A P5000.00, 10-year, 8% bond that pays interest annually was purchased four years ago with a discount of P152.00. If the bond is sold today for P4750.00,
determine
a) the
b) the rate of return realized by the purchaser if he holds on to the bond until maturity. (Ans. 9.1%)
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