3) Don makes a one time investment in the following way: he purchases a 30 year, $5, 000 face value bond with semiannual coupons, and with a semianmual 4% coupon rate and a semianmual 6% yield rate. Immediately after receiving his coupons, he invests his coupons into an account earning a nominal semiannual interest rate of i) = 3%. Find how much is in the account after 30 years and find Don's nominal annual yield rate over the 30 year period.

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
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3) Don makes a one time investment in the following way: he purchases a 30 year, $5, 000 face value bond with semiannual coupons, and with a semianmual 4% coupon rate and a semianmual 6% yield rate. Immediately after receiving his coupons, he invests his coupons into an account earning a nominal semiannual interest rate of i) = 3%. Find how much is in the account after 30 years and find Don's nominal annual yield rate over the 30 year period.
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