A young engineering company is a subcontractor in an effort to develop technology that will reliably detect and respond to release of a nuclear weapon. The company is in need of additional funding and issues a series of $1,000 face value bonds that pay a nominal annual rate of 6% with quarterly payments. The bond matures in 6 years. If you buy one bond for $820, but need to sell it immediately after the 16th interest payment for $820, what is your effective annual rate of return? If you buy one bond for $820, but need to sell it immediately after the 16th interest payment for $820, what is your effective annual rate of return?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A young engineering company is a subcontractor in an effort to develop technology that will reliably detect and respond to release of a nuclear weapon. The company is in need of additional funding and issues a series of $1,000 face value bonds that pay a nominal annual rate of 6% with quarterly payments. The bond matures in 6 years. If you buy one bond for $820, but need to sell it immediately after the 16th interest payment for $820, what is your effective annual rate of return? If you buy one bond for $820, but need to sell it immediately after the 16th interest payment for $820, what is your effective annual rate of return?
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