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will upvote. thanks You purchase a 20-year annual coupon bond with coupon rate of 8% and yield to maturity of 8.6%. The face value of

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You purchase a 20-year annual coupon bond with coupon rate of 8% and yield to maturity of 8.6%. The face value of the bond is $1,000. Your investment horizon is four years. Just after purchasing the bond, the yield to maturity decreases to 7 percent and stays at that level throughout your investment period. Assume that you are able to reinvest all your coupons at 7 percent annual rate and that you sell the bond four years from today when its yield to maturity is 7 percent, calculate the realized rate of return of your investment. 11.3% 12.7% 8.5% 10.2% 9.1%

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