Three years ago, you invested in a $1,000, 10 year, 6% semi-annual bond, paying a price of $970. You've just received a coupon payment for the end of the third year. Today, the bond can be sold for $1,050. If the probability of default is zero, what is the expected annualized return of the bond if you plan to hold 7 more years to maturity? 6.41% 3.21% 5.14% 2.57%

Three years ago, you invested in a $1,000, 10 year, 6% semi-annual bond, paying a price of $970. You've just received a coupon payment for the end of the third year. Today, the bond can be sold for $1,050. If the probability of default is zero, what is the expected annualized return of the bond if you plan to hold 7 more years to maturity? 6.41% 3.21% 5.14% 2.57%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 17P

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