A ten-year, zero-coupon bond with a yield to maturity of 6% has a face value of...
A ten-year, zero-coupon bond with a yield to maturity of 6% has a face value of $1000. An investor purchases the bond when it is initially traded, and then sells it four years later. What is the rate of return of this investment, assuming the yield to maturity does not change?
can someone explain step by step
Homework Answers
If the YTM doesn't change, the investor will earn the YTM over the life of the investment.
So, rate of return = 6%
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