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Assume you have a one-year investinent horizon and are trying to choose among three bonds. All have the same degree of default risk and mature

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Assume you have a one-year investinent horizon and are trying to choose among three bonds. All have the same degree of default risk and mature in 8 years. The first is a zero-coupon bond that pays $1,000 at maturity. The second has a 766 coupen rate and pays the $76 coupon once per yeat. The third has a 9.6% coupon tate and pays the $96 coupon once per yeat. Assurne that all bonifs ate compounded annually. Required: a. If all three bonds are now priced to yield 7.6% to maturity, what are their prices? (Do not round intermediate caleulations. Round your answers to 2 decimal places.) b. If you expect their yleids to maturity to be 7.6% at the beginning of next yeat, what will their prices be then? (Do not round intermediate calculotions. Round your onswers to 2 decimal places.) b. If you expect their yields to maturity to be 7.6% at the beginning of next year, what will their prices be then? (Do not round intermediate colculations, Round your answers to 2 decimal ploces.) c. What is your rate of return on each bond during the one-year holding period? (Do not round intermediote calculations. Round your answers to 2 decimal ploces.)

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