Three years ago you purchased a bond for $974.69.The bond had three years to maturity,a coupon rate of 8%,paid annually,and a face value of $1,000.Each year you reinvested all coupon interest at the prevailing reinvestment rate shown in the table below.Today is the bond's maturity date.What is your realized compound yield on the bond? $$\begin{array} { l c }
\text { Time } & \text { Prevailing Reinvestment Rate } \
0 \text { (purchase date) } & 6.0 \% \
1 & 7.2 \% \
2 & 9.4 \% \
3 \text { (maturity date) } & 8.2 \%
\end{array}$$

Question

Three years ago you purchased a bond for $974.69.The bond had three years to maturity,a coupon rate of 8%,paid annually,and a face value of $1,000.Each year you reinvested all coupon interest at the prevailing reinvestment rate shown in the table below.Today is the bond's maturity date.What is your realized compound yield on the bond? $$\begin{array} { l c } 
\text { Time } & \text { Prevailing Reinvestment Rate } \
0 \text { (purchase date) } & 6.0 \% \
1 & 7.2 \% \
2 & 9.4 \% \
3 \text { (maturity date) } & 8.2 \%
\end{array}$$

Quizplus · Accepted Answer

The Answer of Three years ago you purchased a bond for $974.69.The bond had three years to maturity,a coupon rate of 8%,paid annually,and a face value of $1,000.Each year you reinvested all coupon interest at the prevailing reinvestment rate shown in the table below.Today is the bond's maturity date.What is your realized compound yield on the bond? $$\begin{array} { l c } 
\text { Time } & \text { Prevailing Reinvestment Rate } \
0 \text { (purchase date) } & 6.0 \% \
1 & 7.2 \% \
2 & 9.4 \% \
3 \text { (maturity date) } & 8.2 \%
\end{array}$$

Three Years Ago You Purchased a Bond for $974 A) 643% B) 7

Three Years Ago You Purchased a Bond for $974 A) 643%
B) 7