You purchase a 1000 par-value 10-year bond with 8, Ask an Expert

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You purchase a 1000$ par-value 10-year bond with 8% semi-annual coupon rate for 900$. The purchase is made immediately after a coupon payment, so your next coupon payment is 6 months from now. You are able to re-invest the coupon payments at the nominal rate of 6% convertible semiannually. What is your effective annual compound interest-rate of return over the course of the 10 years?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92845158

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