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Exactly five years ago, Dan bought a bond issued by Titan Co with par value $1,000 and coupon rate 4% (paid semiannually). At the time
Exactly five years ago, Dan bought a bond issued by Titan Co with par value $1,000 and coupon rate 4% (paid semiannually). At the time of purchase, the bond had 21 years to maturity and yield to maturity was 5% BEY. On average, Dan reinvested coupons to earn 5.2% BEY. Dan sold the bond today with yield to maturity 3% BEY.
a) What was Dan's realized yield? Express your answer as a decimal bond equivalent yield with 4 digits after the decimal point (e.g., 0.0123, not 1.23%).
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