Question
Your goal is to earn a rate of return of 5% for the next 4 years. Which of the following bonds can be used to
Your goal is to earn a rate of return of 5% for the next 4 years. Which of the following bonds can be used to guaranteed your goal is achieved?
Choose all that apply.
Group of answer choices
A. A 4-year zero with YTM=5%
B. A 4-year zero with YTM=4%
C. A 6-year zero with YTM=5%
D. A 6-year coupon bond with 4-year duration and YTM=5%
E. A 5-year coupon bond with 4-year modified duration and YTM=5%
F. A 8-year coupon bond with 4-year duration and YTM=5%
G. A 6-year coupon bond with 5-year duration and YTM=4%
H. A 8-year coupon bond with 7-year duration and YTM=5%
I. A 5-year coupon bond with 3-year modified duration and YTM=5%
J. A 10-year coupon bond with 7-year duration and YTM=5%
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