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Bill Gates just bought a 10-year zero-coupon bond at a yield of 5.5%. He thinks interest rates will fall to 4% in two years and
Bill Gates just bought a 10-year zero-coupon bond at a yield of 5.5%. He thinks interest rates will fall to 4% in two years and he plans to sell the bond at that time. (1) What is Mr. Gates expected total rate of return? (2) What is his expected annualized rate of return? Show your work
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