You bought a 5-year US Treasury Note paying a 4% coupon at issuance a year ago when market interest rates on competing investments paid 5%. You now think you might want to sell your note because market interest rates have recently fallen to 4%. If you do sell, what is your total rate of return assuming you held the note for exactly one year?

You bought a 5-year US Treasury Note paying a 4% coupon at issuance a year ago when market interest rates on competing investments paid 5%. You now think you might want to sell your note because market interest rates have recently fallen to 4%. If you do sell, what is your total rate of return assuming you held the note for exactly one year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 17P

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