Calculate the annualized rate of return of your investemnt

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Reference no: EM132015888

Suppose you purchase a 10-year bond with 7.2% annual coupons. You hold the bond for 4 years, and sell it immediately after receiving the fourth coupon. if the bond'syeild to maturiity was5.8% when you purchased and sold the bond.

A. What cash flows will you pay and receive fron your investment in the bond per $100 face value for each of the years you own it? ( draw the cash flow diagram)

B. What is the annualized rate of return of your investemnt ?

Reference no: EM132015888

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