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| rev | Admin | (Created page with "'''Solution: A''' All calculations are in millions. For the ten-year bond, at time ten it is redeemed for 2(1.08)<sup>10</sup>= 4.31785. After being reinvested at 12% it matures at time twenty for 4.31785(1.12)<sup>10</sup> = 13.4106. The thirty-year bond has a redemption value of 30 4(1.08)<sup>30</sup> = 40.2506. For the buyer to earn 10%, it is sold for 10 40.2506(1.1)<sup>-10</sup> = 15.5184 . The gain is 13.4106 + 15.5184 – 6 = 22.9290. {{soacopyright | 2023 }}") | Nov 19'23 at 18:48 | +475 |