Suppose that at time 0 you buy a 6-coupon 30-year bond


Suppose that at time 0 you buy a 6%-coupon 30-year bond priced at par, and at time 0.5 you sell this bond at a yield of 8%.

What is your time 0.5 payoff per $1 of initial investment?

What is the rate of return on your investment (annualized, with semi-annual compounding)?

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Financial Management: Suppose that at time 0 you buy a 6-coupon 30-year bond
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