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Bond A has a par value of $1000 and sells for $900. The bond matures in 6 years, and has a 6% annual coupon rate
Bond A has a par value of $1000 and sells for $900. The bond matures in 6 years, and has a 6% annual coupon rate paid semiannually.
Calculate the realized compound yield for an investor with a 3-year holding period and a reinvestment rate of 7% per year over the period. At the end of the 3 years, the 6% coupon bond with 3 years remaining will have a yield to maturity of 6%.
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