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14 One year ago, an investor purchased a 10-year 8% annual coupon bond at par of $1.000. Todixy (with 9 years ta maturity) the bond
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One year ago, an investor purchased a 10-year 8% annual coupon bond at par of $1.000. Todixy (with 9 years ta maturity) the bond is priced to yield 7.00%. If the bond is sold, what is the total return to the investot pinterest plus appreciation) for the 1 -year holding period? Hint: The total return includes the coupon rate plus the appreciation (or depreciation) due to the change in rates. Therefore, calculate the current price based on the yield, and then calculate the total return wver 1 year based on that price and the coupon payment. Our answer should be between 6.32 and 17.42, rounded to 2 decimal places, with no special characters Step by Step Solution
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