Question: Please explain everything Bond Return 3: You bought a $10,000-face 1%-coupon bond that had four years of remaining maturity one year ago. Rates were 5%.

Please explain everything

Please explain everything Bond Return 3: You bought a $10,000-face 1%-coupon bond

Bond Return 3: You bought a $10,000-face 1%-coupon bond that had four years of remaining maturity one year ago. Rates were 5%. You sold the bond today and lost 6% on your entire bond investment. What is a potential reason you lost 6%? Coupon Bonds became less liquid The issuer was downgraded by a credit ratings agency You bought it thinking the coupon rate was 10% The fed raised interest rates All of the above

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