What is your horizon yield for this investment

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Reference no: EM131865232

You buy a bond at time zero. The yield to maturity is 6%, the annual coupon is 5%, the redemption value is 100, and there are ten years to maturity. After the fourth coupon payment, the interest rate increases from 6% to 8% and remains there. You buy the bond at time zero and reinvest your coupons until the end of a ten-year investment horizon. What is your horizon yield for this investment? (in percent, x.xx without a percent sign)

Reference no: EM131865232

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