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1 Answers are to be entered in the yellow-shaded areas. 2 100 3 Step 1: Find the coupon payments plus the interest-on-interest at the end

1 Answers are to be entered in the yellow-shaded areas. 2 100 3 Step 1: Find the coupon payments plus the interest-on-interest at the end of investment horizon. 4 Coupon rate (%) 9.00% 5 Years to maturity 20 6 Par value (M.S) 7 YTM (%) 8.00% & Investment horizon (years) 3 9 Number of periods (n) 10 Semi-annual coupon payment (C.S) 11 Price value (S) 109.90 12 13 14 15 16 17 Coupon Semi-annual payments + reinvestment interest-on- Reinvestment rate (%) rate (", %) interest (S) 3.0% 3.5% 4.0% 4.5% 5.0% 19 5.5% 20 6.0% 6.5% 22 23 Step 2: Calculate the projected sale price (i.e., the horizon price). 24 Years to maturity 17 25 Number of periods (m) 18 21 26 Semi-annual Effective total return (%) return (%) 27 28 29 30 31 Reinvestment rate (%) 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% Yield (end-of- Semi-annual Horizon price Total future horizon. %) yield (1. %) value (S) 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 32 33 34 35 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 6.5% 3.0% 3.5%. 4.0% 4.57. 5.07 5.5% 6.07. 6.5% 3.0% 3.5%. 4.0% 4.5%. 5.07 5.54 6.0% 6.5%. 3.0%. 3.5% 4.0% 4.5% 5.07. 5.5%. 6.07 6.5% 3.07 3.5% 4.07 4.5% 5.0% 5.5% 6.07 6.5%. 3.0% 3.5% 4.0% 4.5% 5.0% 5.5%. 6.07. 6.5% 3.0% 3.5% 4.07 4.5%. 5.0% 5.5% 6.07 6.5% 3.07 3.5% 4.07 4.5% 5.07. 5.5%. 6.07. 6.5% 5.07 6.07 6.0% 6.0% 6.0% 6.0% 6.0%. 6.0% 6.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.02 8.0% 8.0% 8.07 8.0%. 8.0%. 8.07. 8.07 8.07 9.0% 9.0% 9.0% 9.0%. 9.0%. 9.0% 9.0% 9.07 10.07 10.0% 10.07 10.02 10.07 10.0% 10.0% 10.0% 11.0% 11.07 11.0% 11.0% 11.0% 11.0% 11.07. 11.07. 12.07 12.07 12.07 12.07 12.07 12.07 12.0% 12.07 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 85 86 87 90 91 92 93 1 Answers are to be entered in the yellow-shaded areas. 2 100 3 Step 1: Find the coupon payments plus the interest-on-interest at the end of investment horizon. 4 Coupon rate (%) 9.00% 5 Years to maturity 20 6 Par value (M.S) 7 YTM (%) 8.00% & Investment horizon (years) 3 9 Number of periods (n) 10 Semi-annual coupon payment (C.S) 11 Price value (S) 109.90 12 13 14 15 16 17 Coupon Semi-annual payments + reinvestment interest-on- Reinvestment rate (%) rate (", %) interest (S) 3.0% 3.5% 4.0% 4.5% 5.0% 19 5.5% 20 6.0% 6.5% 22 23 Step 2: Calculate the projected sale price (i.e., the horizon price). 24 Years to maturity 17 25 Number of periods (m) 18 21 26 Semi-annual Effective total return (%) return (%) 27 28 29 30 31 Reinvestment rate (%) 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% Yield (end-of- Semi-annual Horizon price Total future horizon. %) yield (1. %) value (S) 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 32 33 34 35 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 6.5% 3.0% 3.5%. 4.0% 4.57. 5.07 5.5% 6.07. 6.5% 3.0% 3.5%. 4.0% 4.5%. 5.07 5.54 6.0% 6.5%. 3.0%. 3.5% 4.0% 4.5% 5.07. 5.5%. 6.07 6.5% 3.07 3.5% 4.07 4.5% 5.0% 5.5% 6.07 6.5%. 3.0% 3.5% 4.0% 4.5% 5.0% 5.5%. 6.07. 6.5% 3.0% 3.5% 4.07 4.5%. 5.0% 5.5% 6.07 6.5% 3.07 3.5% 4.07 4.5% 5.07. 5.5%. 6.07. 6.5% 5.07 6.07 6.0% 6.0% 6.0% 6.0% 6.0%. 6.0% 6.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.02 8.0% 8.0% 8.07 8.0%. 8.0%. 8.07. 8.07 8.07 9.0% 9.0% 9.0% 9.0%. 9.0%. 9.0% 9.0% 9.07 10.07 10.0% 10.07 10.02 10.07 10.0% 10.0% 10.0% 11.0% 11.07 11.0% 11.0% 11.0% 11.0% 11.07. 11.07. 12.07 12.07 12.07 12.07 12.07 12.07 12.0% 12.07 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 85 86 87 90 91 92 93

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