Business

Business, 06.07.2019 01:00, yasdallasj

Which bond would pay higher interest rate on your investment a treasury bond or a junk bond

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Business, 26.06.2019 04:10, legendman27

For each of the following pairs, which bond would you expect to pay a higher interest rate? explain.a. you would expect a bond of the u.s. government to pay a higher interest rate as compared to a bond of an eastern european government. b. you would expect a bond that repays the principal in year 2020 to pay a higher interest rate as compared to a bond that repays the principal in year 2040. c. you would expect a bond from coca-cola to pay a higher interest rate as compared to a bond from a software company you run in your garage. d. you would expect a bond issued by new york state to pay a higher interest rate as compared to a bond issued by the federal government.

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Business, 06.10.2019 08:30, MeowieMeowMeow6500

Suppose you purchase a 30-year treasury bond with a 6 % annual coupon, initially trading at par. in 10 years' time, the bond's yield to maturity has risen to 8 % (ear). (assume $ 100 face value bond.) a. if you sell the bond now, what internal rate of return will you have earned on your investment in the bond? b. if instead you hold the bond to maturity, what internal rate of return will you earn on your initial investment in the bond? c. is comparing the irrs in (a) versus (b) a useful way to evaluate the decision to sell the bond? explain.

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