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Suppose you purchase a 10-year bond with 6.3% 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 6.3% 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 4.8% 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 2 3 Cash Flows - $111.70 $6.30 $6.30 $6.30 $113.96 OB. Year 0 2 4 Cash Flows $111.70 $6.30 $6.30 $6.30 $113.96 O C. Year 0 1 2 3 4 Cash Flows - $113.96 $6.30 $6.30 $6.30 $107.66 OD. Year 0 2 3 Cash Flows $107.66 $6.30 $6.30 $6.30 $113.96
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