Question
You buy a bond with a $1,000 par value today for a price of $915. The bond has 5 years to maturity and makes annual
You buy a bond with a $1,000 par value today for a price of $915. The bond has 5 years to maturity and makes annual coupon payments of $83 per year. You hold the bond to maturity, but you do not reinvest any of your coupons. What was your effective EAR over the holding period?
Multiple Choice
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10.58%
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7.54%
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11.04%
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9.11%
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Personal Finance Turning Money Into Wealth
Authors: Arthur J. Keown
6th Edition
0132719169, 978-0132719162
