A 6 % semi-annual coupon, 1,000-par, 12-year bond is bought at issue when yields are 5.5 %. Three years later, with 9 years to maturity, yields are 5 % and the bond is sold; six coupons of 30 were received. Fill the worksheet: the purchase price and the sale price to the cent, and the three-year holding-period return and its annualised equivalent as decimals to four places (e.g. 0.1234).
A 6 % semi-annual coupon, 1,000-par, 12-year bond is bought at issue when yields are 5.5 %. Three years later, with 9 years to maturity, yields are 5 % and the bond is sold; six coupons of 30 were received. Fill the worksheet: the purchase price and the sale price to the cent, and the three-year holding-period return and its annualised equivalent as decimals to four places (e.g. 0.1234).
Answer
Purchase price → 1043.5 · Sale price → 1071.77 · Three-year HPR → 0.199583 · Annualised → 0.062535
Cells - Purchase price · ±0.01 - Sale price · ±0.01 - Three-year HPR · ±0.0001 - Annualised · ±0.0001 `=-PV(0.0275,24,30,1000)` = 1,043.50; `=-PV(0.025,18,30,1000)` = 1,071.77 — new rate AND fewer periods; `=(1071.77-1043.50+6*30)/1043.50` = 0.199583; `=(1+0.199583)^(1/3)-1` = 0.062535. Above the 5.5 % bought at, because yields fell.
Cumulative — Modules 6, 7, 10, 11, 12 and 13 as cited in each lesson; the course’s exam notes (research.md §4 — answer-only marking, the “never seen” tier); original items