Bank plans on holding the bond

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Reference no: EM131974343

Bank of America is considering buying ABC firm's bond with the following terms:

Amount have = $20,000

Time to maturity = 10 years

Coupon rate = 5%

The current yield of maturity = 6%

If the bank plans on holding the bond for 6 years, what would its Annualized Return be if the interest rate drops to 4%?

Reference no: EM131974343

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