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A 30-year maturity bond with 9% coupon rate and annual payment is trading at yield to maturity of 10%. A bond portfolio manager want to
A 30-year maturity bond with 9% coupon rate and annual payment is trading at yield to maturity of 10%. A bond portfolio manager want to hold the bond for two years. She expected to sell the bond at the end of two year at yield to maturity 7%. Coupons reinvestment rate during this two years is 6%. Whats the managers horizon rate of return?
A. | 15.18%
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B. | 42.41%
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C. | 57.78%
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D. | 27.90% |
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