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Question 6 10 pts Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 5.00% Face Value = $1,000

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Question 6 10 pts Assume you buy a bond with the following features Bond maturity = 4 Coupon Rate = 5.00% Face Value = $1,000 Annual Coupons When you buy the bond the market interest rate = 6.00% Immediately after you buy the bond the interest rate changes to 5.50% What is the "reinvestment" effect in year 3? $0.80 $0.80 -$0.78 $0.78

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