Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 5.6%. You hold the bond for five years before selling it.

a. If thebond's yield to maturity is 5.6% when you sellit, what is the annualized rate of return of yourinvestment?

b. If thebond's yield to maturity is 6.6% when you sellit, what is the annualized rate of return of yourinvestment?

c. If thebond's yield to maturity is 4.6% when you sellit, what is the annualized rate of return of yourinvestment?

d. Even if a bond has no chance ofdefault, is your investment risk free if you plan to sell it before itmatures? Explain.

a. If thebond's yield to maturity is 5.6% when you sellit, what is the annualized rate of return of yourinvestment?

The annualized rate of return of your investment is_____%

(Round to two decimalplaces.)

b. If thebond's yield to maturity is 6.6% when you sellit, what is the annualized rate of return of yourinvestment?

The annualized rate of return of your investment is_____%

(Round to two decimalplaces.)

c. If thebond's yield to maturity is 4.6% when you sellit, what is the annualized rate of return of yourinvestment?

Then the annualized rate of return of your investment is____%

(Round to two decimalplaces.)

d. Even if a bond has no chance ofdefault, is your investment risk free if you plan to sell it before itmatures? Explain.(Select the best choicebelow.)

• Fill in the blanks with a percentage