Page 1 of 1
Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 5.7%. You hold the bond for five years befo
Posted: Sat Nov 27, 2021 5:14 pm
by answerhappygod
- Suppose You Purchase A 30 Year Zero Coupon Bond With A Yield To Maturity Of 5 7 You Hold The Bond For Five Years Befo 1 (58.81 KiB) Viewed 75 times
Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 5.7%. You hold the bond for five years before selling it. a. If the bond's yield to maturity is 5.7% when you sell it, what is the annualized rate of return of your investment? b. If the bond's yield to maturity is 6.7% when you sell it, what is the annualized rate of return of your investment? c. If the bond's yield to maturity is 4.7% when you sell it, what is the annualized rate of return of your investment? d. Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain.