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4.3 Furniture for Africa issued 5-year bonds selling for R950 and have a 7.5% annual coupon rate paid semi-annually. 4.3.1 Calculate the current yield

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4.3 Furniture for Africa issued 5-year bonds selling for R950 and have a 7.5% annual coupon rate paid semi-annually. 4.3.1 Calculate the current yield of one Furniture for Africa bond. 4.3.2 Calculate the yield to maturity for one Furniture for Africa bond. (2) (3) 4.3.3 Calculate the realised compound yield for an investor with a 3-year holding period and a reinvestment rate of 6.5% over the period. At the end of the 3 years, the 7.5% coupon bonds with 2-years remaining will sell to yield 7%. (6)

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