MONTH

Assuming that the yield doesn’t increase to 10% until the end of year, the $40 mid-year coupon payment is reinvested for half a year at 9%, compounded monthly. Its future value at the end of the year is: $40 × (1.045) = $41.80 and the rate of return on the bond investment is: Rate of return = = 3.20%. 23. ................
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