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i need an explanation to this wuestion please Rate of Return: Total income per period per dollar invested. Example2: You buy a $1,000 par, 20-year,
i need an explanation to this wuestion please
Rate of Return: Total income per period per dollar invested. Example2: You buy a $1,000 par, 20-year, 10\% annual coupon bond for $1,000. The interest rate is 10%. One year later, you sell it. What is your rate of return? (Assume that interest rate increases by 2% during the first year) Rate of Return =investmentcouponincome+pricechange Rate of Return =1,000100+(852.61,000)=0.0474=4.74%Note:P0=$1,000andP1=$852.6 Step by Step Solution
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