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Question 13 Not yet answered Points out of 3.00 Flag question Part 1, this example illustrates the concept about price risk and reinvestment risk. Assume you purchase a five-year annual coupon bond that pays $60 each year, has a yield to maturity of 6% and has a face value of $1,000. Suppose the yield for the same bond jumps to 7% one day after your purchase, and remains at 7% till maturity. Yields of comparable bonds are assumed to remain at 7% after the initial jump, and the received annual coupons can be reinvested at 7%. What will be your return if you hold your bond for only one day? What will be your annualized rate of return if you hold it for two years? Select one: O a. a loss of 4.10% for one day; an annualized rate of return of 4.78% for two years O b. a loss of 6.34% for one day; an annualized rate of return of 5.16% for two years O c. a gain of 4.24% for one day; an annualized rate of return of -4,52% for two years d. a loss of 4.10% for one day; an annualized rate of return of 5.16% for two years O e. a loss of 6.34% for one day; an annualized rate of return of 6.46% for two years Time left 1:58:53 HEWLETT PACKARD