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Assume that you purchase a 2-year 5% annual coupon bond on a yield to maturity of 7%. You hold the bond until maturity, however interest

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Assume that you purchase a 2-year 5% annual coupon bond on a yield to maturity of 7%. You hold the bond until maturity, however interest rates immediately fall to 5% after you purchase the bond. What is the realised compound yield on the bond? a. 5.00% X b. 7.04% C. 6.95% d. 6.84% e. 7.11% Your answer is incorrect. The correct answer is: 6.95%

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