Suppose that you just bought a four-year $1,000 coupon bond with a coupon rate of 5.7% when the market interest rate is 5.7%. You sell the bond one year later after the market interest rate falls to 3.7%. The rate of return earned on the bond during the year was %. (Round your response to two decimal places.)

Suppose that you just bought a four-year $1,000 coupon bond with a coupon rate of 5.7% when the market interest rate is 5.7%. You sell the bond one year later after the market interest rate falls to 3.7%. The rate of return earned on the bond during the year was %. (Round your response to two decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 8P

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