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Jose purchased a euro bond, which has a par value of $1,000, a 3% annual coupon rate, and an annualyield to maturity of 2.80% with
Jose purchased a euro bond, which has a par value of $1,000, a 3% annual coupon rate, and an annualyield to maturity of 2.80% with five years until maturity. The euro bond pays semiannual coupons. After two years Jose received four semi-annual coupons and he sold the bond at a price of $1010. If he was able to invest thecouponsat a semi-annual return of 2.50%, what is his total realized return over the two years?
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