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You buy a bond today for $3000 with very unique features. First, the bond will pay $522 in three years and that is the only
You buy a bond today for $3000 with very unique features. First, the bond will pay $522 in three years and that is the only coupon. The face value is $4500, and this will be paid when the bond matures in 7 years. However, you expect to sell the bond in three years after getting the only coupon. In other words, when sold, the bond will have four years left to maturity. If you can earn on the reinvestment rate and expect to sell the bond with a yield to maturity of 8.4%, what is the total return for the band? (Your answer should be two
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