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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 the bond's yield to maturity
Suppose you purchase a 10-year bond with 6.2% annual coupons. You hold the bond for four years, and sell it the bond's yield to maturity was 5.4% 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 3 Cash Flows - $110.21 $6.20 $6.20 $6.20 $104.01 OB. Year 0 1 2 3 Cash Flows $104.01 $6.20 $6.20 $6.20 $110.21 O C. Year 0 2 3 Cash Flows $106.06 $6.20 $6.20 $6.20 $110.21 D. Year 2 + $6.20 3 + $6.20 Cash Flows - $106.06 $6.20 $110.21 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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