Problem

A $10.000.30-year U.S. Treasury bond was purchased in 1980 at 11%, and placed on the marke...

A $10.000.30-year U.S. Treasury bond was purchased in 1980 at 11%, and placed on the market in 1993 when comparable instruments were bringing only 6%.

(a) What is a fair estimate of sale price?

(b) For the 13-year period that the bond was held, what was the rate of return to the bond holder, given the sale pi ice found in (a)?

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Solutions For Problems in Chapter 16