Question: Assume you buy a 20 year 1 000 par value zero coupon bond

Assume you buy a 20-year, $1,000 par value zero-coupon bond that provides a 10 percent yield. Almost immediately after you buy the bond, yields go down to 8 percent.
a. What will be your gain on the investment?
b. What will be your percentage gain?

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  • CreatedSeptember 21, 2015
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