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Suppose you purchase a 10-year bond with 6.2% 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 6.2% 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 5.2% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per $100 face value? b. What is the annual 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 X Cash Flows - $111.24 $6.20 $6.20 $105.04 B. Year X Cash Flows $107.65 $6.20 $6.20 $111.24 O C. Year . Cash Flows - $107.65 $6.20 $6.20 $111.24 OD. Year Cash Flows $105.04 $6.20 $6.20 $6.20 $111.24 b. What is the annual rate of return of your investment? The annual rate of return of your investment is %. (Round to one decimal place.)
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