All coupons were immediately spent when received

Assignment Help Financial Management

Reference no: EM13878793

8 years ago you purchased a 6 percent coupon bond for $945. Today you sold your bond for its face value of $1,000. Coupon payments are made annually. What is your rate of return on the bond in each of the following situations: a) all coupons were immediately spent when received. b) all coupons were reinvested in your bank, which pays 2 percent interest until the bond is sold. c) all coupon were reinvested at 6.4 percent until the bond is sold.

Reference no: EM13878793

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