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Consider a 5-year coupon bond with a face value of $1,000. The bond matures five years from today and pays a coupon of 5% per

Consider a 5-year coupon bond with a face value of $1,000. The bond matures five years from today and pays a coupon of 5% per annum. It has a YTM of 5% at time 0, a YTM of 6% at time 1, a YTM of 8% at time two and a YTM of 10% for time 3 and 4 and 30% at time 5. Assume the investor who owns this bond reinvests the coupons every year at the prevailing rate, and the yield curve is flat through the bond's life. Cashflows are paid annually. What is the annualized rate of return of this investor?

Group of answer choices

4.12%

5.0%

1.5

5.39%

8.12%

10.0%

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