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You have decided to invest in a 3 0 - year zero coupon bond. Bonds of similar risk are currently priced such that on a

You have decided to invest in a 30-year zero coupon bond. Bonds of similar risk
are currently priced such that on a semi-annual basis their yield to maturity is
5.0%. If you buy the bond today and sell it in 3 years, assuming that interest
rates for comparable bonds in 3 years (bonds that mature in 27 years) drops to
4.0%, what will your annual rate of return be for this investment? Face is $1000.

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