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1) You bought a bond with 6% coupon rate, 10 year maturity, and $1000 par value for $1,040 one year ago. Today the bond has
1) You bought a bond with 6% coupon rate, 10 year maturity, and $1000 par value for $1,040 one year ago. Today the bond has a price of $955. If you sell the bond today, what is your return on the investment?
2) What is the price of a zero coupon bond with 8 years of maturity left and a current yield to maturity of 7%? The bond has par value of $1000.
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