Two years ago, you acquired a 10-year zero coupon, $1,000 par value bond at a 12 percent YTM. Recently, you sold this bond at an 8 percent YTM. Using semiannual compounding, compute the annualized horizon return for this investment.

Two years ago, you acquired a 10-year zero coupon, $1,000 par value bond at a 12 percent YTM. Recently, you sold this bond at an 8 percent YTM. Using semiannual compounding, compute the annualized horizon return for this investment.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 5P

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4. Two years ago, you acquired a 10-year zero coupon, $1,000 par value bond at a
12 percent YTM. Recently, you sold this bond at an 8 percent YTM, Using
semiannual compounding, compute the annualized horizon return for this
investment.

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