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20 The yield to maturity on 15-year zero-coupon bonds is 7%. The yield to maturity on a bond with $1000 par value, 7% coupon rate
20 The yield to maturity on 15-year zero-coupon bonds is 7%. The yield to maturity on a bond with $1000 par value, 7% coupon rate with annual coupon payment, and 15-year maturity is 6.2% today. If you buy the coupon bond today, hold it till its maturity, and choose not to reinvest any of the coupons, the effective annual rate of return on the coupon bond over the holding period is around Your choice: 20/25 Qs 3.73% 4.39% 4.76% 5.24%
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