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Consider a bond with an 8 year maturity. The bond pays a semi-annual coupon. Its coupon rate is 12%. The bond is currently selling for

Consider a bond with an 8 year maturity. The bond pays a semi-annual coupon. Its coupon rate is 12%. The bond is currently selling for $1150. Note that the YTM is the semi-annual rate multiplied by 2 to annualize it. (a) What is the bonds YTM? (b) What will the bonds price be after 3 years if the interest rate remains unchanged? (c) If you sell the bond after 3 years, what is your return from owning the bond?

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