**I attempted to submit this question last night along with another question already answered for a total of $25. You asked:”***Please provide formulas used***You buy a very risky bond that promises an 8.8% coupon and return of the $1,000 principal in 10 years. You pay only $500 for the bond.a. You receive the coupon payments for two years and the bond defaults. After liquidating the firm, the bondholders receive a distribution of $150 per bond at the end of 2.5 years. What is the realized return on your investment?b. The firm does far better than expected and bondholders receive all of the promised interest and principal payments. What is the realized return on your investment?” – Sent to Finance Expert Tutor on 6/11/2010 at 10:43pm
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