An investor buys a 10-year annual coupon bond at a yield of 8.7% and sells it 2 years later when it still yields 8.7%. What is his rate of return over this period? 8.7%. 17.4%. Can't say without knowing the coupon. zero.

An investor buys a 10-year annual coupon bond at a yield of 8.7% and sells it 2 years later when it still yields 8.7%. What is his rate of return over this period? 8.7%. 17.4%. Can't say without knowing the coupon. zero.

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

Section: Chapter Questions

Problem 1PS

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An investor buys a 10-year annual coupon bond at a yield of 8.7% and sells it 2 years later when it still
yields 8.7%. What is his rate of return over this period?
8.7%.
17.4%.
Can't say without knowing the coupon.
zero.

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