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General Electric bonds have a 1 0 - year maturity, $ 1 , 0 0 0 face value, and a 7 % annual coupon rate

General Electric bonds have a

10 -

year maturity, $

1, 000

face value, and a

7 %

annual coupon rate paid semi

-

annually. Suppose you paid $

930

for this bond. What is your expected annual return on your investment provided that you keep the bond until it matures and you can reinvest your coupon interest receipts at the YTM

? [

Hint: Calculate YTM of the bond

]

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