Three years ago Quebec Hydro sold an issue of 20-year, 6.5% coupon bonds. Calculate an investor's percent capital gain for the entire three-year holding period if the current semiannually compounded return required in the bond market is:
a) 5.5%.
b) 6.5%.
c) 7.5%.

Question

Three years ago Quebec Hydro sold an issue of 20-year, 6.5% coupon bonds. Calculate an investor's percent capital gain for the entire three-year holding period if the current semiannually compounded return required in the bond market is:
a) 5.5%. 
b) 6.5%. 
c) 7.5%.

Quizplus · Accepted Answer

The Answer of Three years ago Quebec Hydro sold an issue of 20-year, 6.5% coupon bonds. Calculate an investor's percent capital gain for the entire three-year holding period if the current semiannually compounded return required in the bond market is:
a) 5.5%. 
b) 6.5%. 
c) 7.5%.

Three Years Ago Quebec Hydro Sold an Issue of 20-Year