A bond has a face value of $15000 and pays an annual coupon rate of 7.2%. The bond is selling for $14990 now and is expected to be sold for $14800 one year from now. What is the bond's expected rate of return?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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A bond has a face value of $15000 and pays an annual coupon rate of 7.2%. The
bond is selling for $14990 now and is expected to be sold for $14800 one year from
now. What is the bond's expected rate of return?
Answer:
%
(DO NOT ROUND YOUR CALCULATIONS UNTIL YOU REACH THE FINAL
ANSWER. ENTER YOUR RESPONSE ROUNDED TO TWO DECIMAL PLACES.)
Transcribed Image Text:A bond has a face value of $15000 and pays an annual coupon rate of 7.2%. The bond is selling for $14990 now and is expected to be sold for $14800 one year from now. What is the bond's expected rate of return? Answer: % (DO NOT ROUND YOUR CALCULATIONS UNTIL YOU REACH THE FINAL ANSWER. ENTER YOUR RESPONSE ROUNDED TO TWO DECIMAL PLACES.)
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