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Consider a two-year coupon bond with a face value of $100 and a coupon rate of 8% (the next annual coupon is due in one
Consider a two-year coupon bond with a face value of $100 and a coupon rate of 8% (the next annual coupon is due in one year). The one-year spot rate is 4%, the two-year spot rate is 5.9811%, and the bond is trading today for $103.846. What is the expected holding period return if you can sell the bond after the first coupon? 5% 6% 7% 4%
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