Find the holding-period return-find effective annual rate

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Reference no: EM131851916

Suppose you buy a $10,000 face value Treasury bond with quarterly paid coupon rate of 10% per annum, maturing in six months for $9,700. On the bond’s maturity date, you collect face value.

a) Find the holding-period return.

b) Find the annual percentage rate. [Hint: APR = Per period rate × Periods per year]

c) Find the effective annual rate.

Reference no: EM131851916

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