What is the rate of return of this investment

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A 10 year zero coupon bond with a yield to maturity of 5% has a face value of $1000. An investor purchases this bond when it is initially traded, and then sells it five years later. What is the rate of return of this investment, assuming the yield to maturity does not change? Answers say 4.01% can someone please explain this and show their working?

Reference no: EM132036993

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