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Calculate the forecasted compound annual return on the 5 year investment in the following bond: 1 93,47 Settlement date Maturity Planned sale Par value 01.01.2020

Calculate the forecasted compound annual return on the 5 year investment in the following bond:

1 93,47 Settlement date Maturity Planned sale Par value 01.01.2020 01.01.2050 01.01.2025 100,00 Stated rate YTM (current) YTM (in 5Y) Reinvestment rate 6,00% 6,50% 7,00% 5,80% Coupons per year Current price of the bond Expected price of the bond in 2025 88,35

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