A second investor buys the 10-year, 8% annual coupon payment bond and sells the bond after four
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A second investor buys the 10-year, 8% annual coupon payment bond and sells the bond after four years. Assuming that the coupon payments are reinvested at 10.40% for four years, the future value of the reinvested coupons is 37.347111 per 100 of par value.![[8 (1.1040)] + [8 (1.1040)] + [8(1.1040)] +8= 37.347111](https://dsd5zvtm8ll6.cloudfront.net/images/question_images/1698/9/9/5/94165449ee5ef89a1698995940718.jpg){kind=small}
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The interestoninterest gain from compounding is 5347111 37347111 32 After f...View the full answer
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