An investor buys a ($1000 FV) Treasury Strip security with 11 years to maturity at a yield of 5.1%. Two years later the yield to maturity on the strip is 4.0% and the investor decides to sell. What is the compounded annual rate of return on the investment over the investment horizon? For simplicity assume all yields in the question are quoted with annual compounding. Enter your answer as percent to two decimal places, but do not include the % sign.
An investor buys a ($1000 FV) Treasury Strip security with 11 years to maturity at a yield of 5.1%. Two years later the yield to maturity on the strip is 4.0% and the investor decides to sell. What is the compounded annual rate of return on the investment over the investment horizon? For simplicity assume all yields in the question are quoted with annual compounding. Enter your answer as percent to two decimal places, but do not include the % sign.
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 9P
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An investor buys a ($1000 FV) Treasury Strip security with 11 years to maturity at a yield of 5.1%. Two years later the yield to maturity on the strip is 4.0% and the investor decides to sell. What is the compounded annual
Enter your answer as percent to two decimal places, but do not include the % sign.
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