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Say You Purchased a 5% Treasury Bond at Par and Sold

Question 92

Multiple Choice

Say you purchased a 5% Treasury bond at par and sold it exactly two years later when yields were 4% per annum.If coupons were reinvested at 5% per annum, your holding period yield would be:


A) less than or equal to 4% p.a.
B) between 4% and 5% p.a.
C) exactly 5% p.a.
D) more than 5% p.a.
E) Cannot be calculated with the information provided.

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