You buy a UST with a remaining maturity of 10 years at 99, The coupon rate is 6%. You project that 1 year from today, the 9-year UST yield will be 5%. And you project that 2 years from today the 8-year UST yield will be 7% a.) What is your projected total rate of return for the 1-year and 2-year horizon holding periods? You assume that your interest income can be reinvested at an annual rate of 5%. Interest is paid semiannually, and par is $1,000
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Home » Business » You buy a UST with a remaining maturity of 10 years at 99, The coupon rate is 6%. You project that 1 year from today, the 9-year UST yield will be 5%. And you project that 2 years from today the 8-year UST yield will be 7% a.