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Consider a 25-year coupon bond with a face value of $1,000 that pays $100 annual coupons (beginning one year from today). Assume that you invest
Consider a 25-year coupon bond with a face value of $1,000 that pays $100 annual coupons (beginning one year from today). Assume that you invest each coupon in a bank that pays 7% interest. By the maturity date: Calculate the interest earned for reinvesting coupons, as a proportion of all money received for owning the bond until maturity.
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