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A 3-year maturity, 5% coupon bond paying coupons annually is currently selling at par of $1,000. (a) If one invests in this bond until maturity

A 3-year maturity, 5% coupon bond paying coupons annually is currently selling at par of $1,000. (a) If one invests in this bond until maturity and the reinvestment rate is 6% per year, what is the realized compound return for this bond investment? Explain whether the yield to maturity for the bond is bigger or smaller than the realized compound return for this bond investment, and why. (2.5 marks) Click and type your answer.

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