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4. Suppose an investor with a four-year investment horizon is considering purchasing a ten-year 12% semi-annual coupon bond selling at par. The investor expects
4. Suppose an investor with a four-year investment horizon is considering purchasing a ten-year 12% semi-annual coupon bond selling at par. The investor expects he can reinvest the coupon payments at an annual interest rate of 10%, and that at the end of the investment horizon he will be able to sell the bond for $920. What is the total return for this bond?
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Foundations Of Finance
Authors: Arthur J. Keown, John H. Martin, J. William Petty
9th Edition
978-0134083285, 134083288, 978-0134084015
