An investor purchases a bond that does not pay a coupon (zero-coupon) with a face value of
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Question:
An investor purchases a bond that does not pay a coupon (zero-coupon) with a face value of $5,000. Assume the bonds 8.4% yield to maturity is expected to remain constant over the duration of the bonds life. What is the rate of return on his investment, if he sells this bond ten years later?
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4.20%
6.72%
5.04%
8.40%
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