What is the total annual return for this bond

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Reference no: EM131043465

Suppose that an investor is planning to purchase a 9% semi-annual coupon bond selling at par with 10 years to maturity and plans to hold it for 4 years and sell it at an expected yield to maturity of 8.5%. The investor expects that he can reinvest the coupon payments during the holding period at an annual interest rate of 8.8%. What is the total annual return for this bond?

Reference no: EM131043465

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