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Suppose you purchase a 10-year $100 face value bond with 6% annual coupons. You hold the bond for four years, and sell it immediately after
Suppose you purchase a 10-year $100 face value bond with 6% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5% when you purchased and sold the bond,
a) what was the original price of the bond?
b) what was the market price of the bond when you sold it?
c) what is the internal rate of return on your investment?
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