An Investor Purchases a 30-Year, Zero-Coupon Bond with a Face

question 99

Multiple Choice

An investor purchases a 30-year, zero-coupon bond with a face value of $5000 and a yield to maturity of 8.4%. He sells this bond ten years later. What is the rate of return on his investment, assuming yield to maturity does not change?

• A) 6.72%
• B) 5.04%
• C) 8.40%
• D) 4.20%

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