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For the following questions, assume the normal case that coupon payments are semi-annual. a. What is the yield to maturity on a 10-year, 6.4% coupon
For the following questions, assume the normal case that coupon payments are semi-annual. a. What is the yield to maturity on a 10-year, 6.4% coupon bond if the bond is currently selling for $1,000? b. For the bond above, suppose that immediately after purchase market rates change to 2.40%. If you hold the bond for 4 years and then sell it, what is your effective annual return on this investment? a. The YTM is% (enter response rounded to decimal places; i.e., x.xx%) b. Your effective annual return is % (enter response rounded to decimal places; i.e., x.xx%)
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