Question
Interest Rate Risk Karen needs $1,000,000 to retire in five years. There is an annual zero-coupon bond that will mature in 8 years, that has
Interest Rate Risk
Karen needs $1,000,000 to retire in five years. There is an annual zero-coupon bond that will mature in 8 years, that has a YTM of 10.75%.
- If Karen buys the bond and the YTM moves to 8.75% when he sells the bond in 5 years, how much money will Karen have for retirement?
- If Karen buys the bond and the YTM moves to 12.75% when he sells the bond in 5 years, how much money will Karen have for retirement?
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Personal Finance For Dummies
Authors: Eric Tyson
9th Edition
1119517893, 978-1119517894
