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7. Suppose that you purchased a 6 percent coupon, 7-year bond. The bond was priced to yield 8 percent at your purchase, and paid coupon
7. Suppose that you purchased a 6 percent coupon, 7-year bond. The bond was priced to yield 8 percent at your purchase, and paid coupon semiannually. One day after you purchased the bond, interest rates rose to 11 percent and remained unchanged since then. a. Assume that you held the bond till its maturity, calculate the annual) rate of return realized on your investment. b. Assume now that four years have passed since you purchased the bond, and you now liquidate your investment by selling the bond at the prevailing price. Calculate the annual) rate of return realized on your investment
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