Use the Following Information to Answer the Question(s)below

question 46

Multiple Choice

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) .
-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%.

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Definitions:

Wilcoxon Test Statistic

A non-parametric test statistic used to compare two paired groups, assessing whether their population mean ranks differ.

Two-Tail

Refers to a type of hypothesis test that considers both directions of difference or effect, looking for deviations in two opposite directions.

Level Of Significance

The probability threshold below which a result is considered statistically significant.

Nonparametric Tests

Statistical tests that do not assume a specific distribution for the data, often used when parametric test assumptions cannot be satisfied.