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Assure that spot interest rates are as follows: (Total 10 points) Maturity (year) Spot Rate (%) 3 1 2 3 3.5 4 Assume an investor
Assure that spot interest rates are as follows: (Total 10 points) Maturity (year) Spot Rate (%) 3 1 2 3 3.5 4 Assume an investor purchases a 3-year bond with a coupon rate of 4.8% at $102.30, and sells it after one year (right after he received the 1st coupon payment), what is the investor's realized rate of return? Assume the forward rates implied from the spot rates table are actual future spot rates. 3.13% 3% 2.8% 5.25%
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