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A 5-year government bond with a face value of E100 makes annual coupon payments of 6 per cent and offers a yield to maturity of

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A 5-year government bond with a face value of E100 makes annual coupon payments of 6 per cent and offers a yield to maturity of 4 per cent compounded annually. Suppose that one year later bond yields for bonds of this risk class have fallen to 3 per cent. What is the price of the bond in one year (to the nearest 50.01) and (m the rate of return to the nearest 0.01%) which the bondholder has earned over the 12-month period from today to one year from now? Select an answer and submit. For keyboard navigation, use the up/down arrow key to select an answer. 1)E108.90 and (m) 7.57% b E111 15 and (ii) 4.00% E111.15 and () 7.57% d None of the above e 6) E108.90 and (ii) 4.00%

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