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Thread: financial homework help

  1. #1

    financial homework help

    calculating returns:
    suppose you bought a 7 percent coupon bond one year ago for $893. the bond sells for $918 today.
    a. assuming a $1000 face value, what was your total dollar return on this investment over the past year.
    b.what was your total nominal rate of return on this investment over the past yr.
    c.if inflation rate last year was 4 percent, what was your total real rate of return on this investment?

  2. #2
    Elite Member
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    Re: financial homework help

    Please demonstrate a cashflow map and we can start.

  3. #3

    Re: financial homework help

    i'm kind of stuck to what to do because my online class instructor does not give me notes to start

  4. #4
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    Re: financial homework help

    Quote Originally Posted by dragonfly1
    i'm kind of stuck to what to do because my online class instructor does not give me notes to start
    Well fire him/her then!

    Do you know what "a 7% bond with semiannual coupons" means?
    I'm just an imagination of your figment !

  5. #5

    Re: financial homework help

    yes i think it means it paid twice a yr would it be 70 x 2= 140.00

  6. #6
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    Re: financial homework help

    You MUST be able to draw a map. In this case, it might look like this:

    Time is years.

    0 -- (893.00)
    -- +70.00
    1 -- +70.00 + 918.00

  7. #7

    Re: financial homework help

    here is what i recd from the instructor
    the total dollar return is the change in price plus the coupon payment
    the nominal percentage return of the bond is total dollar return/purchase price
    (1+R)=(1+r)(1+h)

  8. #8
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    Re: financial homework help

    Quote Originally Posted by dragonfly1
    the total dollar return is the change in price plus the coupon payment
    Well DFly, the dollar return is EASILY calculated as 70 + 70 + 918-893 = 165 : do you not "see" that?
    I'm just an imagination of your figment !

  9. #9

    Re: financial homework help

    sounds like you are being smart here, if i saw it i would not ask for help
    i'm new to this that's why i'm asking for help

  10. #10
    Elite Member
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    Re: financial homework help

    Quote Originally Posted by dragonfly1
    sounds like you are being smart here, if i saw it i would not ask for help
    i'm new to this that's why i'm asking for help
    My purpose was to try and see "where you're at", as we have no idea since you are disregarding the rules
    and showing no work; if you are so easily "hurt", then I'll bow out and leave you in TK's hands
    I'm just an imagination of your figment !

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