Suppose you purchase a 30-year Treasury bond with a 5% annual coupon, initially...
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Suppose you purchase a year Treasury bond with a annual coupon, initially trading at par. In years time, the bond's yield to maturity has risen to EARAssume $ face value bond.a If you sell the bond now, what internal rate of return will you have earned on your investment in the bond? b If instead you hold the bond to maturity, what internal rate of return will you earn on your initial investment in the bond?
Suppose you purchase a year Treasury bond with a annual
coupon, initially trading at par. In years time, the bond's
yield to maturity has risen to EARAssume $ face
value bond.a If you sell the bond now, what internal rate of return will
you have earned on your investment in the bond? b If instead you hold the bond to maturity, what internal rate
of return will you earn on your initial investment in the bond?
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