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Please help me answer the following question from part b to part d with clear answers. Thank you Question 11 Suppose you purchase a 30-year
Please help me answer the following question from part b to part d with clear answers. Thank you
Question 11
Suppose you purchase a 30-year zero-coupon bond with a yield to maturity of 5.6%. You hold the bond for five years before selling it. a. If the bond's yield to maturity is 5.6% when you sell it, what is the rate of return of your investment? b. If the bond's yield to maturity is 6.6% when you sell it, what is the rate of return of your investment? c. If the bond's yield to maturity is 4.6% when you sell it, what is the rate of return of your investment? d. Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain. a. If the bond's yield to maturity is 5.6% when you sell it, what is the rate of return of your investment? The rate of return of your investment is 5.59 %. (Round to two decimal places.) b. If the bond's yield to maturity is 6.6% when you sell it, what is the rate of return of your investment? The rate of return of your investment is %. (Round to two decimal places.)Step by Step Solution
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