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Suppose you paid $890 to buy a 30-year 5% coupon bond with annual payment and plan to hold it for 5 years. Your forecast is
Suppose you paid $890 to buy a 30-year 5% coupon bond with annual payment and plan to hold it for 5 years. Your forecast is that the bonds yield to maturity will be 7% when it is sold and that the reinvestment rate on the coupons over the 5- year holding period will be 6%. Whats your annualized compound rate of return? A. 1.52% B. 2.4% C. 5.54% D. 3.34%
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