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The answer should be E. Do not give an answer using excel 15. A 10-year 1000 par value bond was purchased to yield 6% convertible
The answer should be E. Do not give an answer using excel
15. A 10-year 1000 par value bond was purchased to yield 6% convertible semiannually. The bond has a coupon rate of 4% and pays semiannual coupons. The bond investor reinvests the coupons into an account paying a nominal annual rate of 8% convertible semiannually. Find the overall yield earned by the bond investor over the life of the bond, expressed as an effective annual rate. (A) 6.1% (B) 6.2% (C) 6.3% (D) 6.4% (E) 6.5%Step by Step Solution
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