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A 15 year maturity bond has a 4.6% coupon rate, paid annually. It sells today for $1.010.00. A bond market analyst forecast that in 5

A 15 year maturity bond has a 4.6% coupon rate, paid annually. It sells today for $1.010.00.

A bond market analyst forecast that in 5 years, 10-year maturity bonds will sell at a yield to maturity of 4.25%.

With an upward sloping yield curve, the analyst believes that coupons can be invested in short term securities at a rate of 4.25%.

a.) Calculate the compound annualized rate of return of the 15-year bond over the five year holding period.

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