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At the beginning of 2019, Sunnyco bond has a coupon rate of 8%, matures in 9 years and is payable semi-annually. Yield to maturity is
At the beginning of 2019, Sunnyco bond has a coupon rate of 8%, matures in 9 years and is payable semi-annually. Yield to maturity is 9%. Assume a face value of $1,000.
A. What price will the bond sell?
B. If we expect that the bond can sell at $1,080 at the end of 2019, what is the yield to maturity (assume exactly one year).
C. What is the holding period return if you sell the bond after one year?
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