A 10-year corporate bond issued January 1, 1992 and sold to investors at par ($1,000) with a 10 percent coupon rate is called on January 1, 1995 at par plus one year's coupon income. At time of call prevailing rates on comparable securities were 8 percent. If the bond's holder reinvested the call price at 8 percent for 7 years, what is his 10-year holding-period yield?

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The Answer of A 10-year corporate bond issued January 1, 1992 and sold to investors at par ($1,000) with a 10 percent coupon rate is called on January 1, 1995 at par plus one year's coupon income. At time of call prevailing rates on comparable securities were 8 percent. If the bond's holder reinvested the call price at 8 percent for 7 years, what is his 10-year holding-period yield?

A 10-Year Corporate Bond Issued January 1, 1992 and Sold