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Consider a ve-year bond with 7.5 percent annual coupon, currently selling at par. Your estimate of its yield to maturity a year from today is
Consider a ve-year bond with 7.5 percent annual coupon, currently selling at par. Your estimate of its yield to maturity a year from today is 7.5%. Suppose you plan to sell your bond at the end of one year, right after receiving your coupon payment. What is your expected return on bond investment? Note: You dont need a calculator to answer this question, if you have sucient knowledge on bond. Explain how you reach your answer.
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