At that time you expect the discount rate on similar bonds


You are considering buying an 8% annual pay coupon bond with a $1000 face value, and 20 years to maturity that cost $1200 today. You expect to sell the bond in 5 years. At that time you expect the discount rate on similar bonds with similar risk to be 8%. If you’re correct, the yield over the 5-year period would be:

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Financial Management: At that time you expect the discount rate on similar bonds
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