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What is the rate of return of your investment

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Question - Suppose you purchase a 30-year zero-coupon bond with a yield to maturity of 6.3%. You hold the bond for five years before selling it.

a. If the bond's yield to maturity is 6.3% when you sell it, what is the rate of return of your investment?

b. If the bond's yield to maturity is 7.3% when you sell it, what is the rate of return of your investment?

c. If the bond's yield to maturity is 5.3% when you sell it, what is the rate of return of your investment?

d. Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain.

Reference no: EM132892268

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