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Answer questions using Excel Functions: PV, RATE. Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the bond
Answer questions using Excel Functions: PV, RATE.
Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the bond for five years before selling it.
a. If the bonds yield to maturity is 6% when you sell it, what is the internal rate of return of your investment?
b. If the bonds yield to maturity is 7% when you sell it, what is the internal rate of return of your investment?
c. If the bonds yield to maturity is 5% when you sell it, what is the internal rate of return of your investment?
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