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A 30 -year maturity bond has a 6.7% coupon rate, paid annually. It sells today for $881.17. A 20 -year maturity bond has a 6.2%

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A 30 -year maturity bond has a 6.7% coupon rate, paid annually. It sells today for $881.17. A 20 -year maturity bond has a 6.2% coupon rate, also paid annually. It sells today for $893.1. A bond market analyst forecasts that in five years, 25 -year maturity bonds will sell at yields to maturity of 7.7% and 15 -year maturity bonds will sell at yields of 7.2%. Because the yield curve is upward sloping. the analyst believes that coupons will be invested in short-term securities at a rate of 7.2%. o. Calculate the (annualized) expected rate of return of the 30-year bond over the 5 -year period. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. b. What is the (annualized) expected return of the 20 year bond? (Round your onswer to 2 decimal ploces.)

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