Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the

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Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the bond for five years before selling it.

a.If the bond's yield to maturity is 6% when you sell it, what is the internal rate of return of your investment?

b.If the bond's yield to maturity is 7% when you sell it, what is the internal rate of return of your investment?

c.If the bond's yield to maturity is 5% when you sell it, what is the internal rate of return of your investment?

d.Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain.

Posted Date: May 19, 2024 10:00 PM

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Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the

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