Question
Assume you purchased a 20-year 4% coupon bond with semiannual coupon payments when the YTM was 6%. One day after purchasing the bond, the interest
Assume you purchased a 20-year 4% coupon bond with semiannual coupon payments when the YTM was 6%. One day after purchasing the bond, the interest rate dropped by 1% and there would be no further interest rate change for the next 20 years0.
- If you plan to hold this bond to its maturity, what will be your expected rate of return?
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
