Question : Question 1.
a. What the difference between : 4457
a. What is the difference between interest rates and returns on a bond? Is the RET equal to the interest rate? Why or Why not?
b. What would be the rate of return on a coupon bond bought at face value of $1000 today( with a coupon rate of 15%) and sold for $1200 one year later ?
c. What is the method to calculate the rate of Capital Gain (g)? Is there a capital gain or loss in the above cae? How much?