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Eight years ago, Olivia, embarked on her first fiscal journey by acquiring a captivating $1,000 par value bond. Its appeal was the 10% coupon rate,
Eight years ago, Olivia, embarked on her first fiscal journey by acquiring a captivating $1,000 par value bond. Its appeal was the 10% coupon rate, with semi-annual payments, as well as the 20-year term to maturity. It being her first investment she diligently placed any coupons received into a savings account that paid 8% interest, compounded semi-annually. Today, the yield to maturity for this bond sits at 8%, and Olivia is contemplating selling the bond. What would her realized rate of return be
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