Bonds - To Sell or not to Sell - Bond A details Term Coupon Rate Par YTM Purchase Price 10 years 10 annual $1,000 10 $1,000.00 Scenario 1 reinvestment

Bonds - To Sell or not to Sell - Bond A details Term Coupon...

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Bond A details Term: 10 years Coupon Rate: 10% annual Par: $1,000 YTM: 10% Purchase Price: $1,000.00 Scenario 1 - reinvestment into another bond immediately Bond A Holding Period: 2 years YTM: 6% for remaining 8 years Sale Price: $1,248.39 Holding Period Yield: 21.23% ------> Bond B details Term: 8 years Coupon Rate: 6% annual Par: $1,000 YTM: 6% Purchase Price: $1,000.00 Geometric Return for full term:
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  • Winter '14
  • Finance, purchase price

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