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Please answer Q4 given the information Flight-to-safety, is a financial market phenomenon occurring when investors sell what they perceive to be higher-risk investments and purchase
Please answer Q4 given the information
Flight-to-safety, is a financial market phenomenon occurring when investors sell what they perceive to be higher-risk investments and purchase safer investments, such as gold and US treasury bonds (Wikipedia). When you first heard the outbreak of COVID-19 on Jan 22, 2020, in fear of the potential harm to the economy, you decide to purchase 10 -year US treasury note. YTM of available 10-year US treasury note was around 1.70\% (annualized rate), with coupon rate of 1.12% (annualized rate). Coupon is paid every 6 months. 6 months later the YTM of the same bond drops to 0.64% (right before the first coupon payment). Assuming the maturity date of the bond you invested is Jan 22, 2030. Q4: What is the annualized bond rate of return in percentage term after holding the bond for 6 months (right before the first coupon payment) Step by Step Solution
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