An investor purchases a 30-year, zero-coupon bond with a face value of $5,000 and a yield to maturity of 6.3%. He sells this bond ten years later. What is the rate of return on his investment, assuming yield to maturity does not change? OA. 3.78% OB. 6.3% OC. 5.04% D. 3.15%

An investor purchases a 30-year, zero-coupon bond with a face value of $5,000 and a yield to maturity of 6.3%. He sells this bond ten years later. What is the rate of return on his investment, assuming yield to maturity does not change? OA. 3.78% OB. 6.3% OC. 5.04% D. 3.15%

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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Question

An investor purchases a 30-year, zero-coupon bond with a face value of $5,000 and a yield to
maturity of 6.3%. He sells this bond ten years later. What is the rate of return on his investment,
assuming yield to maturity does not change?
OA. 3.78%
OB. 6.3%
OC. 5.04%
OD. 3.15%

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