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1. A 22-year German government bond (bund) has a face value of 500 and a coupon rate of 5% paid annually. Assume that the interest
1. A 22-year German government bond (bund) has a face value of 500 and a coupon rate of 5% paid annually. Assume that the interest rate (in euros) is equal to 7.20% per year. What is the bond's PV? 2. The twenty-year bond yields 6.9% and has a coupon of 8.8%. Assume annual coupon payments and a face value of $100. a) If this yield-to-maturity remains unchanged, what will be its price at year 0? What will be its price at year 1? b) What is the total return to an investor who held the bond over this year
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