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Assume an investor with a 5 - year investment horizon is considering purchasing a 7 year 6 % coupon bond selling at par ( $

Assume an investor with a 5-year investment horizon is considering purchasing a 7 year 6% coupon bond selling at par ($100). The investor expects to reinvest the coupons at 5% and that the bond will be selling to offer a yield to maturity of 4% in five years. The bond pays semi-annually.

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