The Whittier Union High School District in Whittier, California is issuing $18 m

Question

The Whittier Union High School District in Whittier, California is issuing $18 million in new muniicpal bonds as follows:

Coupon rate: 4.00%

Pay frequency; Semiannual

First coupon pyament date: 8/1/2014

Maturity date: 8/1/2022

Standard and Poors rating: AA-

If, immediately afte receiving the 8/1/2019 coupon payment, the investor sells all 300 of the Whittier bonds for the fair market value computed in Quesiton 5, what would be the annulized rate of return on this investment? Express your answer as a percentage (i.e. 10% would be inptu as 10) and round off to the nearest 0.01

Explanation / Answer

This is plain multiplication. 300 * $1108.90 = 332670$

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