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Mary buys a 10 year bond with $10,000 face value, semiannual nominal bond rate 3%, and semiannual nominal yield rate 4%. She wants to reinvest
Mary buys a 10 year bond with $10,000 face value, semiannual nominal bond rate 3%, and semiannual nominal yield rate 4%. She wants to reinvest the semiannual coupons (immediately after each coupon is received) into a fund so that her non time valued net profit at maturity (A.V. of coupons + face value at maturity bond price) is $5,000. Find the interest rate (as a semiannual nominal rate) that the account must earn for this to occur.
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