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Devin is, a private investor, purchases $1,000 par value bonds with a 12 percent coupon rate and a 9 percent yield to maturity. devin will hold the bonds until maturity. thus, he will earn a return of ____ percent. 12 9 10.5 more information is needed to answer this question

Respuesta :

mathmate
The par value of a bond is the amount issuer promises to pay the bond-holder on the maturity date.

The overall return depends on when the bond was bought.  The closer to the maturity date, the lower the overall return, or yield-to-maturity (YTM).
If the YTM has been quoted as 9%, it means that the effective yield from today to the maturity date is 9%, according to the current price, and accounting for the 12% coupon, if applicable.
So Devin will earn a return of 9%.


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