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Assume that you purchase a five-year, $1,000 par value bond, with a 6 percent coupon and a yield of 7 percent. Immediately after you purchase

Assume that you purchase a five-year, $1,000 par value bond, with a 6 percent coupon and a yield of 7 percent. Immediately after you purchase the bond, yields rise to 8 percent and remain at that level to maturity. Calculate the realized horizon yield if you hold the bond to maturity. Interest is paid annually.

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