(SOLVED) Five years ago you purchased an 8 coupon bond for


Question Description:

$15

Five years ago you purchased an 8% coupon bond for $975. Today you sold the bond for $1,000. What is your rate of return on the bond in each of the following situations?
a. All coupons were immediately spent when received.
b. All coupons were reinvested in your bank account, which pays 1% interest until the bond is sold.
c. All coupons were reinvested at 8.64% until the bond is sold.

Answer

$15