Answer:
10.60%
Explanation:
First, we calcualte the returns and then solve for the rate like a normal compounding:
returns:
annual coupon payment. 1,000 face value x $ 13.68 = $ 136.80
sales price: 913.73
total: 136.8 x 6 + 913.73 = 820.80 + 913.73 =
cost: 947.68
to record the effective rate of return:
[tex]947.64 (1+ r_e)^6 = 1,734.5\\[/tex]
[tex]\sqrt[6]{\frac{1,734.5}{947.68}} -1 = r_e[/tex]
effective rate of return: 0.105992287 = 10.60%
