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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 12?-year, 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 12?-year, 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 2.10?%. If you hold the bond for 7 years and then sell? it, what is your effective annual return on this? investment?

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