Question: Use the following information to answer the question ( s ) below. Suppose you purchase a 2 0 - year treasury bond with a 6

Use the following information to answer the question(s) below.
Suppose you purchase a 20-year treasury bond with a 6% annual coupon ten years ago at par. Today the bond's yield to maturity has risen to 8%(EAR).
11 If you hold this bond to maturity, the internal rate of return you will earn on your investment will be closest to:
A)5.0%.
B)5.6%.
C)6.0%.
D)8.0%.
12 If you sell this bond now, the internal rate of return you will earn on your investment will be closest to:
A)5.0%.
B)4.9%.
C)6.0%.
D)8.0%.

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