Question
Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 7.00% Face Value = $1,000 Annual Coupons When you
Assume you buy a bond with the following features
Bond maturity = 4
Coupon Rate = 7.00%
Face Value = $1,000
Annual Coupons
When you buy the bond the market interest rate = 5.00%
Immediately after you buy the bond the interest rate changes to 6.70%
What is the "reinvestment" effect in year 3?
Group of answer choices
$3.82
-$3.71
-$3.82
$3.71
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
