Question: Suppose you purchase a 3 0 - year, zero - coupon bond with a yield to maturity of 5 . 6 % . You hold

Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 5.6%. You hold the bond for five years before selling it. A) If the bond's yield to maturity is 5.6%. When you sell it, what is the annualized rate of return of your investment? B) If the bond's yield to maturity is 6.6% when you sell it, what is the annualized rate of return of your invesment? C) If the bond's yield to maturity is 4.6% when you sell it, what is the annualized rate of return of your invesment? D) Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures?

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