Maturity bond-what rate of return does each bond offer

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A 30-year maturity bond has a 8.9% coupon rate, paid annually. It sells today for $883.67. A 20-year maturity bond has 8.4% coupon rate, also paid annually. It sells today for $885.5. A bond market analyst forecasts that in 5 years, 25-year maturity bonds will sell at yields to maturity of 9.9% and 15-year maturity bonds will sell at yields of 9.4%. Because the yield curve is upward sloping, the analyst believes that coupons will be invested in short-term securities at a rate of 5.3%. What rate of return does each bond offer over the 5-year period? (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

Reference no: EM131056847

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