Use the Following Information for Questions

question 55

Multiple Choice

Use the following information for questions
A bank has a planned 2-year investment horizon.It is considering investing in a 2-year bond that pays 6% annually versus investing in a 4-year bond that pays 6.5% annually and then selling it after two years.The annual coupon payments can be reinvested at 4%.
-What will be the realized compound yield if the bank invests in the 4-year security and sells it at the end of two years, assuming interest rates remain unchanged?

• A)4.00%
• B)5.48%
• C)5.94%
• D)6.01%
• E)6.85%

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Definitions:

Loyal Buyers

Consumers who repeatedly purchase the same brand or product, demonstrating fidelity and consistent preference over time.

Ancillary Services

Additional services or benefits provided beyond the primary product or service, often enhancing customer experience or value.

Promotional Mix

The combination of communication tools an organization uses to convey a clear, consistent, and compelling message about its brand and products.

Buyer Confidence

The degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.