Suppose you purchase a 10-year bond with 6.8% annual coupons. You hold the bond for...
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Suppose you purchase a 10-year bond with 6.8% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5,3% when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond por $100 face value? b. What is the annual rate of return of your investment a. What cash flows will you pay and receive from your investment in the bond per $100 face valuo? The cash flows from the investment are shown in the following timeline: (Round to the best choice below.) A Year 3 Cash Flows - $114.34 $6.80 $6.80 $6,80 $107.54 B. Year 0 1 2 3 4 Cash Flows $107.54 $6 80 $6.80 $6.80 $114.34 0 2 3 C Year 4 Cash Flows - $111.42 56.80 $6.80 $6.80 $114.34 D. Year 0 1 2 3 $111.42 Cash Flows $6.80 $6.80 $6.80 $114 34 b. What is the annual rate of return of your investment? The annual rate of return of your investment is % (Round to one decimal place.)
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