An investor purchased a 20-year 5.5% Treasury note at the issue price of 108.5 on June 1, 2021. As the government response to the COVID-19 pandemic continued, investors became worried about the U.S. government's ability to service its growing debt burden and sold large quantities of Treasury securities. The decreased demand pushed Treasury prices down. On June 1, 2022, exactly one year after buying the T-note, the investor sold it for 97 after receiving two-coupon payments. What was the yield to maturity when the investor purchased the note? What was the investor's realized return, stated as an APR, when she sold the note?

Answer rating: 100% (QA)

Solution Yield to Maturity YTM YTM is a measure of the return an investor earns when investing in a ... View the full answer