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Today is the maturity date of a bond you purchased 3 years ago. At the time of purchase, you paid $9740.69 for the bond. The
Today is the maturity date of a bond you purchased 3 years ago. At the time of purchase, you paid $9740.69 for the bond. The bond had a coupon rate of 10%, paid annually, and a face value of $8,000. What is your realized compound return on the bond if the first coupon you received was reinvested at 10% for two years, and the second coupon you received was reinvested at 2% for one year?
a. 1.97%b. 2.90%c. 6.23%d. 8.97%e. None of the above
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