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I don't think B is the correct anwer, I accidentally clicked it when taking a screenshot. Suppose you purchase a 10-year bond with 6.4% annual
I don't think B is the correct anwer, I accidentally clicked it when taking a screenshot.
Suppose you purchase a 10-year bond with 6.4% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.9% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the annual rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) O A. Year $6.40 $6.40 $6.40 $114.04 Cash Flows $107.64 B. Year Cash Flows - $114.04 ? $6.40 $6.40 $6.40 $107.64 OC. Year 0 Cash Flows -$111.64 1 $6.40 2 $6.40 3 $6.40 * 4 $114.04 OD. Year w T + Cash Flows $111.64 $6.40 $6.40 $6.40 $114.04 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to one decimal place.)Step by Step Solution
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