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In 2020 an investor purchased a bond that has an 8.0% semi-annual coupon, and a 20- year maturity (2040). The bond was purchased with a
In 2020 an investor purchased a bond that has an 8.0% semi-annual coupon, and a 20- year maturity (2040). The bond was purchased with a yield to maturity of 8.0%. Over the years the investor will put all coupon payments into a money market fund and expects to earn an average return of 5.0%. What will be the total horizon yield or realized compound yield to maturity on the bond if held to maturity? (8 points) Realized Compound YTM = _ In 2020 an investor purchased a bond that has an 8.0% semi-annual coupon, and a 20- year maturity (2040). The bond was purchased with a yield to maturity of 8.0%. Over the years the investor will put all coupon payments into a money market fund and expects to earn an average return of 5.0%. What will be the total horizon yield or realized compound yield to maturity on the bond if held to maturity? (8 points) Realized Compound YTM = _
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