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A Treasury coupon bond has 5 - year to maturity with a face value of $ 1 , 0 0 0 and a current market
A Treasury coupon bond has year to maturity with a face value of $ and a current market price of $ The bonds pay coupon annually and have a yield to maturity of percent. Jake, a bond speculator, just purchased the bond at the current market price.
What is the coupon rate?
decimals
Part
Jake is not happy with the YTM he wants to earn higher rate of return. He anticipates to hold the bond for only one year and earn in that year. His strategy is to cash in the first coupon at the end of the first year and then sell the bond right away. What market price should he predict in one year's time?
decimals
What will be the YTM in one year if his prediction is accurate?
decimals
Part
What will be the market price in one year if the YTM stays at
decimals
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