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Suppose you purchase a 10-year bond with 6.1% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth
Suppose you purchase a 10-year bond with 6.1% 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 5.1% when you purchased and sold the band, a. what cash flows will you pay and receive from your investment in the bond per $100 face value? b. what is the rate of return of your investment? a. What cash flows will you pay and receive from your investment in the bond per $100 face value? The cash flows from the investment are shown in the following timeline. (Round to the best choice below.) O A Year 0 1 2 3 4 Cash Flows $107.63 $6.10 $6.10 $6.10 S111.16 OB. Year 0 1 2 3 4 Cash Flows $105.06 $6.10 $6.10 S6.10 S111.16 OC. Year 0 1 2 3 4 Cash Flows -$111.16 $6.10 $6.10 $6.10 $105.06 OD. Year 0 1 2 3 4 Cash Flows $107,68 $6.10 $6.10 $6.10 $111.16
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