Four years ago Jason bought a 15-year, 10% coupon bond for $1,150. The coupon is paid
annually. Jason sold the bond today for $950. What’s his rate of return on this investment?
5. Five years ago Steve bought a 15-year, 8% coupon bond and bond’s yield at the time of the
purchase was 7.5%. The coupon is paid annually. Steve sold the bond this morning when the
bond’s yield was quoted at the level of 10%. What was Steve’s rate of return on the investment?
The correct answer is 4.64% and 4.75%. Can you show me how to get to the correct answer while using a financial calculator?