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Fixed Income Securities 4. (1.5 points) Today is t = 0. You have just bought a five-year zero-coupon Treasury bond with $1,000 face value. You
Fixed Income Securities 4. (1.5 points) Today is t = 0. You have just bought a five-year zero-coupon Treasury bond with $1,000 face value. You paid $920. (a) What is the annually compounded yield to maturity on the bond? (b) Suppose that yields at all maturities increase to 2% immediately after you have purchased the bond. Calculate the annualized holding period return if you sell the bond one year after you have purchased it, at t = 1. (c) Suppose instead that you did not sell the bond at t = 1 and held it to maturity. What is the annualized holding period return for the five year investment
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