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Suppose you buy a 30-year 7% coupon rate (annual payment) for $910. You plan to hold the bond for 25 years. Your forecast is that
Suppose you buy a 30-year 7% coupon rate (annual payment) for $910. You plan to hold the bond for 25 years. Your forecast is that the bonds yield to maturity will be 5% when it is sold and that the reinvestment rate on the coupons will be 8%. Whats your annualized compound return? A. 9.51% B. 2.57% C. 3.19% D. 6.13%
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