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Assume you purchase (at par) one 18-year bond with a 6.40 percent coupon and a $1,000 face value. Suppose you are only able to reinvest
Assume you purchase (at par) one 18-year bond with a 6.40 percent coupon and a $1,000 face value. Suppose you are only able to reinvest the coupons at a rate of 4.40 percent. If you sell the bond after 13 years when the yield to maturity is 7.40 percent, what is your realized yield?
5.66%
3.72%
4.31%
5.43%
6.98%
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