4. A bond is selling for $934.74. The coupon rate is 8%. It has ten-years...
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Accounting
4. A bond is selling for $934.74. The coupon rate is 8%. It has ten-years untill maturity, with semi-annual compounding.
- For the bond in problem 4, assume that the re-investment/interest rate has changed to 10%. Calculate the realized compound yield at a re-investment rate of 10%. If an investor wanted to maximize the rate of return, what would you advise the investor to dosell or hold the bond? Why?
(please don't use Excel formulas)
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