A Treasury bond that you own at the beginning of the year is

A Treasury bond that you own at the beginning of the year is worth $1,090. During the year, it pays $46 in interest payments and ends the year valued at $1,100.

What was your dollar return and percent return? (Round your percent return answer to 2 decimal places.)

Solution

Answer )

Dollar Return = Coupon + Change in Market price = $ 46 + (1100-1090) = $ 56 .

Percentage return = (Dollar Return / Intial value )*100

= 56/1090 *100 = 5.14% .