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5. An investor is considering the purchase of a(n) 8.500%, 18-year corporate bond that's being priced to yield 10.500%. She thinks that in a year,
5. An investor is considering the purchase of a(n) 8.500%, 18-year corporate bond that's being priced to yield 10.500%. She thinks that in a year, this bond will be priced in the market to yield 9.500%. Using annual compounding, find the price of the bond today and in 1 year. Next, find the holding period return on this investment, assuming that the investor's expectations are borne out. The price of the bond today is $ The price of the bond one year from today is $ The holding period return on this investment is . (Round to the nearest cent.) (Round to the nearest cent.) %. (Round to two decimal places.)
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