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Suppose you purchase aten-year bond with 12 % 12% annual coupons.You hold the bond for four years and sell it immediately after receiving the fourth

Suppose you purchase aten-year bond with 12 %

12% annual coupons.You hold the bond for four years and sell it immediately after receiving the fourth coupon. If thebond's yield to maturity was 11.06 %

11.06% when you purchased and sold thebond,

a. What cash flows will you pay and receive from your investment in the bond per $ 100

$100 facevalue?

b. What is the internal rate of return of yourinvestment?

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