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An investor is considering the purchase of a(n) 6.625%, 15-year corporate bond that's being priced to yield 8.625%. She thinks that in a year, this

An investor is considering the purchase of a(n)

6.625%,

15-year

corporate bond that's being priced to yield

8.625%.

She thinks that in a year, this bond will be priced in the market to yield

7.625%.

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 investor's expectations are borne out.

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