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Investor A buys a $1,000 10-year bond paying semi-annual coupons at i (2) =5%, redeemable at par to yield i (2) =6%/a. She sells the
Investor A buys a $1,000 10-year bond paying semi-annual coupons at i(2) =5%, redeemable at par to yield i(2) =6%/a.
She sells the coupons to Investor B who wishes to yield i(2) =4%/a and she sells the strip bond to Investor C who wishes to yield i (4) =5.5%/a.
What profit does Investor A make? (please show work, not excel)
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