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An investor is considering the purchase of a n 7.750%, 18-year corporate bond that's being priced to yield 9.750%. She thinks that in a year,
An investor is considering the purchase of a n 7.750%, 18-year corporate bond that's being priced to yield 9.750%. She thinks that in a year, this bond wil be priced in the market to yield 8.750%. Using annual compounding, find the price of the bond today and in 1 year. Next, find the holding period return on this investment, assuming that the investors expectations are borne out The price of the bond today is ST (Round to the nearest cent.) The price of the bond one year from today is s(Round to the nearest cent.) The holding period return on this investment is %. (Round to two decimal places.)
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