PLEAS HELP! I DON'T UNDERSTANDQUESTION $4$

$5$ points

On June $1^{st},2020,$ Coca Cola $(KO)$ issued bonds for one billion dollars. The bonds have a par value of $$1,000,$

coupon rate of $2\mathrm{.}75\%$ payable semiannually, and $40$ years maturity $($maturity date: $6/1/2060).$

What is the HPR $($holding period return$)$ for an investor who purchased these bonds at launch $(\frac{6}{1}\frac{?}{20})$ for $$970\mathrm{.}30$

and sold them three years later $(\frac{6}{1}\frac{?}{23})$ for $$681\mathrm{.}83?$

$-29\mathrm{.}73\%$ over the three years.

$-24\mathrm{.}35\%$ over the three years.

$-19\mathrm{.}74\%$ over the three years.

$-9\mathrm{.}90\%$ over the three years.

QUESTION $5$

On June $1^{st},2020,$ Coca Cola $($KO$)$ issued bonds for one billion dollars. The bonds have a par value of $$1,000,$

coupon rate of $2\mathrm{.}75\%$ payable semiannually, and $40$ years maturity $($maturity date: $6/1/2060).$

What is the average annual return for an investor who purchased these bonds at launch $(\frac{6}{1}\frac{?}{20})$ for $$970\mathrm{.}30$ and sold

them three years later $(6/1/23)$ for $$681\mathrm{.}83?$ HINT: Don't divide HPR$/3.$ Consider the effects of compounding. Find the

annual interest rate that would make the initial investment of $$970\mathrm{.}30$ become $$681\mathrm{.}83$ after three years.

$-9\mathrm{.}90\%$ per year.

$-9\mathrm{.}50\%$ per year.

$-0\mathrm{.}95\%$ per year.

$+9\mathrm{.}90\%$ per year.