A six-year government bond makes annual coupon payments of 6% and offers a yield of 3% annually compounded. Suppose that two year later the bond yields 1% at the end of the year. What return has the bondholder earned over the 24-month period? Multiple Choice 16.1% 28.6% 25.5% 21.3% 17.2%
A six-year government bond makes annual coupon payments of 6% and offers a yield of 3% annually compounded. Suppose that two year later the bond yields 1% at the end of the year. What return has the bondholder earned over the 24-month period? Multiple Choice 16.1% 28.6% 25.5% 21.3% 17.2%
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
Section: Chapter Questions
Problem 1PS
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Question
A six-year government bond makes annual coupon payments of 6% and offers a yield of 3% annually compounded.
Suppose that two year later the bond yields 1% at the end of the year.
What return has the bondholder earned over the 24-month period?
Multiple Choice
-
16.1%
-
28.6%
-
25.5%
-
21.3%
-
17.2%
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