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A semi-annual Treasury bond with a coupon rate of 5% has a principal of $1,000 and a maturity of 30 years. a) If the current
A semi-annual Treasury bond with a coupon rate of 5% has a principal of $1,000 and a maturity of 30 years.
a) If the current YTM is 6%, what is the price of the bond?
b) Assume that 6 months have passed and that the YTM of the bond is now 5.8%. What is the new price of the bond?
c) Assume that you bought the bond at the price computed in a), held it for six months, and then sold it at the price computed in b). What is the annual HPR?
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
6th Edition
0201538997, 978-0201538991
