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What is the total return of this investment

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Question - Consider the 20-year 8% coupon bond selling for $829.73 with a yield to maturity of 10% in Illustration 3-34. Suppose an investor has a 5-year investment horizon and expects to be able to reinvest the coupon interest payments at an annual rate of 6%. At the end of the planned investment horizon he expects the then 15-year bond will be selling to offer a yield to maturity of 7%. What is the total return of this investment?

Reference no: EM132816907

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