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1) (10 marks) A bond that pays semi-annual coupons at j2 = 4% has coupon payments of $500. The bond is redeemable at 105

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1) (10 marks) A bond that pays semi-annual coupons at j2 = 4% has coupon payments of $500. The bond is redeemable at 105 on July 7, 2032. The bond was purchased by Investor A on July 7, 2017 at a price P, to yield j2 = 5%. (a) (7 marks) Generate the first 2 lines (time 0 to 2 inclusive) of the bond amortization schedule. Round calculated schedule values to the nearest penny. (b) (3 marks) Investor A sells the bond to another investor on January 7, 2022 (just after the coupon was paid that day) for a quoted price of q =101.5. Using the method of averages, what yield rate, j2 did Investor A earn over the time he owned the bond?

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