Rates on bonds of comparable length


Suppose that, in July, 1995, you bought a 20-year zero-coupon bond with a maturity value of $150,000 and a yield of 16% annually. In July, 2005, your bond had 10 years remaining until maturity. Rates on bonds of comparable length were around 5.2%. You decide to sell your bond to an investor looking for a return of 5.2% annually.

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Business Management: Rates on bonds of comparable length
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