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Consider a two-year bond with face value F=1000 and a coupon rate of c=10%. The coupon payment is made semi-annually. Suppose the bond is trading
Consider a two-year bond with face value F=1000 and a coupon rate of c=10%. The coupon payment is made semi-annually. Suppose the bond is trading at a price Bo = $950. The rate of return on this bond if an investor bought it toda_(b)_. [Hint: Use current yield in the calculations of the rate of return in part y and decided to hold it till maturity is closest to
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