Consider the following three bonds that all have par values of Sh. 100,000. I. A 10- year zero coupon bond priced at 48.

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answerhappygod
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Consider the following three bonds that all have par values of Sh. 100,000. I. A 10- year zero coupon bond priced at 48.

Post by answerhappygod »

Consider the following three bonds that all have par values of
Sh. 100,000. I. A 10- year zero coupon bond priced at 48.20. II. A
5-year 8% semi-annual-pay bond priced with a YTM of 8%. III. A
5-year 9% semi-annual-pay bond priced with a YTM of 8%. Required
Rank the three bonds in terms of how important reinvestment income
is to an investor who wishes to realize the stated YTM of the bond
at purchase by holding it to maturity.
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