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An investor buys a 9-year, 6.9% annual coupon bond at par ($100). Right after the purchase, the discount rate increases to 8.7% (assume a flat
An investor buys a 9-year, 6.9% annual coupon bond at par ($100). Right after the purchase, the discount rate increases to 8.7% (assume a flat spot rate curve) and remains at 8.7% for the next 7 years. The investor sells the bond after 7 years (right after receiving the 7th coupon payment). What is this investor's realized annual return in these 7 years?
Assume annual compounding, and that interest rates remain at 8.7% over the entire holding period. Enter your answer as a percentage and rounded to 1 decimal.
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