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An investor is consideringthepurchase of an 8%, 18-year corporatebondthatsbeingpricedtoyield 10%. Shethinksthat in a year, thisbondwill be priced in the market toyield 9%. Using annualcompounding, findtheprice

  1. An investor is consideringthepurchase of an 8%, 18-year corporatebondthatsbeingpricedtoyield 10%. Shethinksthat in a year, thisbondwill be priced in the market toyield 9%. Using annualcompounding, findtheprice of thebondtodayand in oneyear. Next, findthe holding periodreturn on thisinvestment, assumingthattheinvestorsexpectationsareborneout.

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