Problem
A well-known industrial firm has issued $1000 bonds that carry 4% nominal annual interest paid semiannually. The bonds mature 20 years from now, at which time the industrial firm will redeem them for $1000 plus the terminal semiannual interest payment. From the financial pages of your newspaper you learn that the bonds may be purchased for $715 each ($710 for the bond plus a $5 sales commission). What nominal annual rate of return would you receive if you purchased the bond now and held it to maturity 20 years from now?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.