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3. (22 points) (a), You purchased a newly issued 10-year Treasury Note (para $100,000) from the Federal Government a year ago. When you bought the

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3. (22 points) (a), You purchased a newly issued 10-year Treasury Note (para $100,000) from the Federal Government a year ago. When you bought the bond, its YTM was 8 %. The coupon rate on this bond is 8 % paid annually. The current YTM of the bond is 7.2 %. What is your total percentage return on this bond if you decide to sell your bond today? If the inflation rate was 3 % over the past 10 years, what would be your total real return on this investment? (b). A stock has had returns of -10 percent, 19 percent, - 5 percent, 28 percent, and 5 percent over the last five years. What are the arithmetic and geometric returns for the stock?! (c). You purchased a zero-coupon bond (par = $1,000) one year ago for $720. The bond had ten years to maturity when you bought the bond last year. The market interest rate on this bond is now 4%. What was your total return during the past year? Assume semiannual compounding

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