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A bond has a 10 percent coupon rate, makes annual payments, matures in 12 years, and has a yield-to-maturity of 7 percent. One year from
A bond has a 10 percent coupon rate, makes annual payments, matures in 12 years, and has a yield-to-maturity of 7 percent.
One year from now the bond will have 11 years until maturity. Assume market interest rates increase to 9 percent. Given this: g. What will be the bonds price one year from now? h. If you purchased the bond at the price in (a) and sold the bond at the price in (g) what would be your capital loss once you sold? What would be your annualized holding period return?
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