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You buy a $1,000 par value bond with a 6.5% coupon rate today for a price of $761.91. The bond has 7 years to maturity.
You buy a $1,000 par value bond with a 6.5% coupon rate today for a price of $761.91. The bond has 7 years to maturity. You sell the bond at the end of Year 4 for $886.09. If you reinvested the interest payments at 5% each year, what was your "annual realized yield" over the 4-year holding period for this investment? 11.23% 11.76% 12.43% 13.04%
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