If you  buy a 25-yr, 6% annual coupon bond for $883.46 (when YTM is 7%) and plan to hold it for 15 yrs.  If you forecast the YTM will be 7.50% when it is sold in 15 yrs, while the reinvestment rate is expected to be 6.6% in the first 15 years, what is your average annual rate of return (horizon yield)?

Answer rating: 100% (QA)

Answer To calculate the average annual rate of return horizon yield for this bond investment we need ... View the full answer