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Assume that an investor pays $920 for a long-term bond that carries a coupon of 7%. In 3 years, he hopes to sell the issue
Assume that an investor pays $920 for a long-term bond that carries a coupon of 7%.
In 3 years, he hopes to sell the issue for $1,120.
If his expectations come true, what yield will this investor realize? (Use annual compounding.) What would the holding period return be if he were able to sell the bond (at $1,120) after only 9 months?
The yield will be _%
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