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B E H C D F G K M Five years ago, Mr. Harlem purchased a 10% coupon (paid annually), $1,000 face value, 20-year maturity

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B E H C D F G K M Five years ago, Mr. Harlem purchased a 10% coupon (paid annually), $1,000 face value, 20-year maturity bond at par value when it was first issued. Today, the bond's yield to maturity is 8%. Mr. Harlem sold the bond in the secondary market today. Required: What price did Mr. Harlem pay for the bond? 5 7 B 9 10 11 12 13 14 15 At what price did Mr. Harlem sell the bond today? 16 17 18 19 20 21 22 23 24 25 Compute the rate of return (holding period yield) Mr. Harlem earned on his investment. 26 27 28 29 30 31 32 33

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