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Assume that an investor pays $800 for a long-term bond that carries a coupon of 8%. In 3 years, he hopes to sell the issue
Assume that an investor pays $800 for a long-term bond that carries a coupon of 8%. In 3 years, he hopes to sell the issue for $950. If his expectations come true, what yield will this investor realize? (Use annual compounding) Also, What would the holding period return be if he were able to sell the bond (at 950) after only 9 months?
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