An investor purchases a $11-$year, $6\mathrm{.}1\%$ annual coupon payment bond at a price equal to par

value. After the bond is purchased and before the first coupon is received, interest rates increase

by $1\mathrm{.}7\%.$ The investor sells the bond after $6$ years. Assume that interest rates remain unchanged at $6\mathrm{.}1+1\mathrm{.}7\%$ over the $6-$year holding period.

Assuming that all coupons are reinvested over the holding period, what is the investor's $6-$year horizon yield?

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orrect Answer

$5\mathrm{.}4766$ margin of error $\frac{+}{-}1\%$