Question
You have 5 years until you need to take your money out of your investments to make a planned expenditure. Right now bonds are
You have 5 years until you need to take your money out of your investments to make a planned expenditure. Right now bonds are promising an 8% return. You buy a 5-year duration bond. After you buy the bond, interest rates fall to 6% and stay there for the full five years. You reinvest the coupons and earn 6%. You sell the bond after five years. Your realized return will be more than the originally promised 8% Your realized return will be less than the originally promised 8% O Your realized return will be equal to the originally promised 8% You don't have sufficient information to infer what your realized return will be O None of the above
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