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Question
A 20-year maturity corporate bond has a 6.5% coupon rate (the coupons are paid annually). The bond currently sells for $925.50. A bond market analyst forecasts that in 5 years yields on such bonds will be at 7%. You believe that you will be able to reinvest the coupons earned over the next 5 years at a 6% rate of return. What is your expected annual compound rate of return if you plan on selling the bond in 5 years?A. 7.37%
B. 7.56%
C. 8.12%
D. 8.54%
Answer
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Related questions
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Passive investors with well-diversified international portfolios _________.
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Q:
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Q:
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Q:
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