QUESTION 5

On June 1^st, 2020, Coca Cola (KO) issued bonds for one billion dollars. The bonds have a par value of $1,000, coupon rate of 2.75% payable semiannually, and 40 years maturity (maturity date: 6/1/2060).

What is the average annual return for an investor who purchased these bonds at launch (6/1/20) for $970.30 and sold them three years later (6/1/23) for $681.83? HINT: Dont divide HPR/3. Consider the effects of compounding. Find the annual interest rate that would make the initial investment of $970.30 become $681.83 after three years.

		-9.90% per year.
		-9.50% per year.
		-0.95% per year.
		+9.90% per year.