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Last year, you purchased a $1,000 par value bond with a 7.5% annual coupon and a 20 -year maturity. At the time of the purchase,
Last year, you purchased a $1,000 par value bond with a 7.5% annual coupon and a 20 -year maturity. At the time of the purchase, it had an expected YTM of 8%. After receiving the coupon, you sold the bond today for $939.05. What is your return rate in one year? (Hint: find out how much did you pay for the bond last year?) Select one: a. 5.68% b. 18.28% c. 2.75% d. 2.11% e. 6.64% Bond valuation. A bond with a face value of $1,000 matures in 9 years and has a 7% semiannual coupon. The bond is currently traded at $846. Which of the following statements is CORRECT? Select one: a. The nominal yield to maturity is 9.59%, and you would sell each bond for $846 if you think that a "fair" market interest rate (discount rate) for such bonds is 10.67%. b. The nominal yield to maturity is 9.59%, and you would sell each bond for $846 if you think that a "fair" market interest rate (discount rate) for x such bonds is 8.67%. c. The nominal yield to maturity is 8.28%, and you would sell each bond for $846 if you think that a "fair" market interest rate (discount rate) for such bonds is 9.59%. d. The nominal yield to maturity is 4.80%, and you would sell each bond for $846 if you think that a "fair" market interest rate (discount rate) for such bonds is 6.67%. e. The nominal yield to maturity is 8.67%, and you would sell each bond for $846 if you think that a "fair" market interest rate (discount rate) for such bonds is 5.59%
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