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A bond portfolio manager invested in a $100,000 parcel of the 8.00% 15 July 2030 Treasury bond on 15 January 2018 when the market yield
A bond portfolio manager invested in a $100,000 parcel of the 8.00% 15 July 2030 Treasury bond on 15 January 2018 when the market yield was 8.20% and sold the bonds on 15 July 2022 at 7.80%. Coupons were reinvested at 6.80%. (4 Marks) Calculate the: (i) buying and selling prices of the bonds, (ii) the accumulated value of the coupons, and (ili) the investment yield achieved by the manager.
A bond portfolio manager invested in a $100,000 parcel of the 8.00% 15 July 2030 Treasury bond on
15 January 2018 when the market yield was 8.20% and sold the bonds on 15 July 2022 at 7.80%.
Coupons were reinvested at 6.80%. (4 Marks)
Calculate the:
(i) buying and selling prices of the bonds,
(ii) the accumulated value of the coupons, and
(ili) the investment yield achieved by the manager.
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