Use the following information for questions
A bank has a planned 2-year investment horizon. It is considering investing $1,000 in a 2-year bond that pays 6% annually versus investing in a 4-year bond that pays 6.5% annually and then selling it after two years. The annual coupon payments can be reinvested at 4%.
-What will be the realized compound yield if the bank invests in the 4-year security and sells it at the end of two years, assuming interest rates remain unchanged? The price at sale after two years will be $1,009.17.
A) 4.00%
B) 5.48%
C) 5.94%
D) 6.01%
E) 6.85%

Question

Use the following information for questions 
A bank has a planned 2-year investment horizon. It is considering investing $1,000 in a 2-year bond that pays 6% annually versus investing in a 4-year bond that pays 6.5% annually and then selling it after two years. The annual coupon payments can be reinvested at 4%.
-What will be the realized compound yield if the bank invests in the 4-year security and sells it at the end of two years, assuming interest rates remain unchanged? The price at sale after two years will be $1,009.17.
A) 4.00%
B) 5.48%
C) 5.94%
D) 6.01%
E) 6.85%

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The Answer of Use the following information for questions 
A bank has a planned 2-year investment horizon. It is considering investing $1,000 in a 2-year bond that pays 6% annually versus investing in a 4-year bond that pays 6.5% annually and then selling it after two years. The annual coupon payments can be reinvested at 4%.
-What will be the realized compound yield if the bank invests in the 4-year security and sells it at the end of two years, assuming interest rates remain unchanged? The price at sale after two years will be $1,009.17.
A) 4.00%
B) 5.48%
C) 5.94%
D) 6.01%
E) 6.85%

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