King has purchased a bond for ₹1,000 with a coupon payment of ₹250 and sold for ₹1,200. (i) What is the holding return of King ?

CS Professional · Financial, Treasury and Forex Management · PYQS · June 2017
King has purchased a bond for ₹1,000 with a coupon payment of ₹250 and sold for ₹1,200. (i) What is the holding return of King ?

Answer & Explanation:

Holding period return = (Price gain + Coupon payment) / Purchase price * 100 Holding return of King when bond is sold for ₹1,200 = {(1200 - 1000) + 250} / 1000 * 100 = 45%

Topics: Financial Management

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