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An investor purchases a 1 3 - year, 5 . 5 % annual coupon payment bond at a price equal to par value. After the

An investor purchases a 13-year, 5.5% annual coupon payment bond at a price equal to par
value. After the bond is purchased and before the first coupon is received, interest rates increase
by 1.2%. The investor sells the bond after 5 years. Assume that interest rates remain unchanged
at 5.5+1.2% over the 5-year holding period.
Assuming that all coupons are reinvested over the holding period, what is the investors 5-year horizon yield?

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