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24. A coupon bond that pays interest of 5% annually has a par value of $1,000, matures in 3 years, and is selling today at
24. A coupon bond that pays interest of 5% annually has a par value of $1,000, matures in 3 years, and is selling today at $974. What is the effective rate of return you will earn on this bond if you are able to reinvest your coupon payments at the following rates: Year 1:3.9%; Year 2:4.2%. A. 3.00% B. 3.08% C. 4.29% D. 5.88% E. 6.51%
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