nominal annual rate

Get your Assignment in a Minimum of 3 hours

Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.

Free Inquiry Order A Paper Now Cost Estimate

 Assume that you are considering the purchase of a $1,000 par value bond that pays interest of $70 each six months (Total of $140 per year) and has 10 years to go before it matures. If you buy this bond, you expect to hold it for 5 years and then to sell it in the market. You (and other investors) currently require a nominal annual rate of return of 16%, but you expect the market to require a nominal rate of return of only 12% when you sell the bond due to a general decline in interest rates. How much should you be willing to pay for this bond today?

"Is this question part of your assignment? We Can Help!"

"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"

Get Started