Suppose you purchase a 30-year zero-coupon bond with a, Ask an Expert

Economics

Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the bond for five years before selling it.

a) If the bond's yield to maturity is 6% when you sell it, what is the internal rate of return on your investment?

b) If the bond's yield to maturity is 7% when you sell it, what is the the irr on your investment?

c) Even if a bond has no chance of default, is our investment risk free if you plan to sell it before it matures? Explain

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91423182

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