An investor buys a 10-year bond with a 6.5% annual coupon and a YTM of 6%....

  

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An investor buys a 10-year bond with a 6.5% annual coupon and a YTM of 6%. Before the first coupon payment is made, the YTM for the bond decreases to 5.5%. Assuming coupon payments are reinvested at the YTM, the investor's return when the bond is held to maturity is: An investor buys a 10-year bond with a 6.5% annual coupon and a YTM of 6%. Before the first coupon payment is made, the YTM for the bond decreases to 5.5%. Assuming coupon payments are reinvested at the YTM, the investor's return when the bond is held to maturity is:

Answer rating: 100% (QA)

To calculate the investors return when the bond is held to maturity we need to consider the reinvest... View the full answer