financial homework help

dragonfly1

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Aug 9, 2010
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6
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? :(
 
Please demonstrate a cashflow map and we can start.
 
i'm kind of stuck to what to do because my online class instructor does not give me notes to start
 
dragonfly1 said:
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?
 
You MUST be able to draw a map. In this case, it might look like this:

Time is years.

0 -- (893.00)
½ -- +70.00
1 -- +70.00 + 918.00
 
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)
 
dragonfly1 said:
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?
 
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
 
dragonfly1 said:
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 :idea:
 
i gave you what the instructor gave me which is no help that's why i'm asking for help i don't know where to start - i don't know what else to give you :(
 
dragonfly1 said:
i gave you what the instructor gave me which is no help that's why i'm asking for help i don't know where to start - i don't know what else to give you :(

Well there is another resource - what does your textbook say?
 
dragonfly1 said:
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
This is a bad sign, dfly. If you are spending your time arguing with us, rather than trying to learn, you do not understand our motivation or your purpose. We're only here to help. For one, lots of folks ask for help just because they are lazy, so your premise that you wouldn't be asking is not valid.

You should have formulas and descriptions in your texk book or other course materials. You found a definition or description of the Nominal Rate. How about the other parts? Is there a collection of definitions or must you scour the pages for them?
 
marian33 said:
Honestly speaking, when it comes to math, that was my very difficult homework. But I think with regards to your homework, try to get it with the percentage formula. I also try it when I read your problem and I got $17,000 a year on my answer. Good luck!
Ya, ya...go away...
 
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