Capital gain yield of bond


Problem:

A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid annually.

Required:

Question: If the current market price is $750, what is the capital gain yield of this bond over the next year?

  • .72%
  • 1.85%
  • 2.58%
  • 3.42%

Note: Explain all calculation and formulas.

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Finance Basics: Capital gain yield of bond
Reference No:- TGS0881513

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