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Please I need help : You buy a bond when it still has 20 years of residual maturity. Its nominal rate (annual coupon) is 5%.
Please I need help :
You buy a bond when it still has 20 years of residual maturity. Its nominal rate (annual coupon) is 5%. At that time, the market rate is 8%.A few days after your purchase, the market rate drops to 6% (this assumption is then still verified). You will sell your bond 12 years later. What will have been the overall annual profitability of your investment?
Please please please !!
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