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A newly issued U . S . Federal T - Bond matures in 2 4 years. The coupon rate is 4 % and coupons are

A newly issued U.S. Federal T-Bond matures in 24 years. The coupon rate is 4% and coupons are paid semi-annually. The bond is priced at $86.11(FV = $100) and yields 5%. The economy is slowing and many forecasters predict a recession. You expect that the monetary authorities to lower interest rates. You expect the yield to fall to 4.26%. You want to earn $1M by investing in bonds to profit from the interest rate change, how many bonds do you buy? When calculating profit, round the new price of the bond to two decimal places.

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