Posted by Tony on .
Please help me out this problem! :)
suppose that I buy a 10 yr bond today for $1000 and the interest rate when the bond is issued is 5 percent. the day after I buy the bond, the market interest rate on 10yr bonds rises to 7percent. if I keep the bond for the full 10 yrs until it matures, what is the bond's average annual return?
Hmm, please help me T.T