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Suppose you purchase a 10-year bond with 6.8% 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 6.8% 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 4.7% 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 4 Cash Flows $110.76 $6.80 $6.80 $6.80 $117.56 OB. Year 0 1 2 3 4 Cash Flows -$116.45 $6.80 $6.80 $6.80 $117.56 O C. Year 0 1 2 4 Cash Flows $116.45 $6.80 $6.80 $6.80 $117.56 OD. Year 0 1 2 3 4 Cash Flows - $117.56 $6.80 $6.80 $6.80 $110.76
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