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A portfolio manager buys $20 million par value of a 15-year bond that promises to pay 10% interest ratio per year. The reinvestment rate per
A portfolio manager buys $20 million par value of a 15-year bond that promises to pay 10% interest ratio per year. The reinvestment rate per period is 8%.
- Is $20 million the price of the bond? Explain.
- What is the ROR of the bond?
- What will be the market price of the bond at the 8% yield?
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Financial Markets And Institutions
Authors: Stanley Eakins Frederic Mishkin
9th Global Edition
1292215003, 978-1292215006
