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a. Suppose that today you buy an annual coupon bond with a coupon rate of 6.5 percent for $1,040. The bond has 15 years

a. Suppose that today you buy an annual coupon bond with a coupon rate of 6.5 percent for $1,040. The bond has 15 years to maturity and a par value of $1,000. What rate of return do you expect to earn on your investment? Rate of Return: b. Two years from now, the YTM on your bond has declined by one percentage point, and you decide to sell. What price will your bond sell for? Price: c. What is the HPY on your investment? HPY:

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