An investor purchases a 30-year, zero-coupon bond with a face value of $5000 and a yield to maturity of 8.4%. He sells this bond ten years later. What is the rate of return on his investment, assuming yield to maturity does not change?

Question

Quizplus · Accepted Answer

The rate of return on the investment would be the same as the yield to maturity, 8.4%, because the yield to maturity assumption did not change over the period the bond was held.

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