What rate of return will an investor earn if they buy a 20-year, 10 percent annual coupon bond for $900? They plan on selling this bond at the end of five years for $951? A) 12.0%. B) 9.4%. C) 10.0%. D) 11.3%.
PMT = 100 N=5 FV=951 PV=-900 I/Y=12% A
Why PMT 100?
10% annual coupon payment of a face value of $1,000