You buy a 40-year bond for $949.34. The bond pays a semi-annual coupon (coupon rate is 6%) and it has a par value of $1,000. You want to hold the bond for 12-years at which time you believe you can sell the bond to yield 13%. What is the total return on your horizon if you can reinvest all coupons at 7%?

Answer rating: 100% (QA)

To calculate the total return on your investment horizon you need to consider the coupon payments th... View the full answer