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Old 10-24-2010, 10:43 PM   #1
v-unit
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Default Help me with finance?

I figure I would try it here. Doing an online quiz and currently have 16/18 but this last question is worth 6 potentially throwing me down to 16/24 (66%)

The question reads:

Suppose that today you buy a 15 percent coupon bond making annual payments for $1,342. The bond has 12 years to maturity. What rate of return do you expect to earn on your investment

Answer = 9.98%

4 years from now, the YTM on your bond has declined by 1.60 percent, and you decide to sell. What price will your bond sell for

Answer = $1,374.68

part b), what is the holding period yield (HPY) on your investment

Answer = 11.69%

Worst part is, I know in a few months I'll look back at this and because they will be really east to me. Can someone just help for the time being though? I have the answers but I need to actually do the problem so I can learn it.

Reps will be graciously given out for anyone who attempts :)

Last edited by v-unit : 10-24-2010 at 10:45 PM.
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Old 10-24-2010, 10:51 PM   #2
soadrules
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Default Re: Help me with finance?

http://www.moneychimp.com/articles/f.../fmbondytm.htm
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Old 10-24-2010, 11:04 PM   #3
v-unit
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Default Re: Help me with finance?

I only have the payments, the coupon % and the years to maturity...I need 5 factors and I have 3. I figured I could use the coupon % and the payments to get the future value right? But I still don't know how to go after that.

I'm using a TI BA II Plus calculator (Texas Instrument Business Analyst II Plus)
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Old 10-24-2010, 11:53 PM   #4
The Big Skinny
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Default Re: Help me with finance?

well

holding period =

annual income + capital gains/ purchase price

for the other, i would guess that the future value is 1000. often, my teachers do not specify but you are required to use 1000 if not specified.

not sure if this helps but i would need more info to answer the questions

Last edited by The Big Skinny : 10-24-2010 at 11:57 PM.
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Old 10-25-2010, 12:42 AM   #5
xcesswee
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Default Re: Help me with finance?

Lol im studying finance right now, and i still dont know how to approach these problems. I need some sort of formula or so to guide me. Sorry I can't help.
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Old 10-25-2010, 01:33 AM   #6
jazz873
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Default Re: Help me with finance?

I am actually learning the exact same shit right now too. I have no clue wtf i am doing. I need to get the hewlett-packard 12c. It makes life so much easier.
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