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Sue just purchased a 2-year Treasury bond with a coupon rate of j 2 =3.73% p.a. and a face value of $100 that matures at
Sue just purchased a 2-year Treasury bond with a coupon rate of j2 =3.73% p.a. and a face value of $100 that matures at par. The purchase price was $97.80.
c) Sue plans to hold this bond to maturity. Over the next two years the reinvestment rates, it is predicted that the reinvestment rates will be j2=2.4% for year 1 and will be j2=3.1% for year 2. Calculate Sue's total realised compound yield rate. Give your answer in j2 form, expressed as a percentage and rounded to 3 decimal places.
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