Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Suppose you purchase a 30year zero coupon bond with a yield to maturity of 4 You hold the...

Suppose you purchase a 30year zero coupon bond with a yield to maturity of 4 You hold the bond for five years before selling it a If the bonds yield to maturity is 4 when you sell it what is

Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 4%. You hold the bond for five years before selling it.
a. If the bond’s yield to maturity is 4% when you sell it, what is the internal rate of return of your investment?
b. If the bond’s yield to maturity is 5% when you sell it, what is the internal rate of return of your investment?
c. If the bond’s yield to maturity is 3% when you sell it, what is the internal rate of return of your investment?
d. Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain.

Jun 06 2021 View more View Less

Answer (UnSolved)

question Get Solution

Related Questions