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Last year, you purchased a $1,000 par value bond with a 7% annual coupon and a 20-year maturity. At the time of the purchase, it

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Last year, you purchased a $1,000 par value bond with a 7% annual coupon and a 20-year maturity. At the time of the purchase, it had an expected YTM of 7.5%. After receiving the coupon, you sold the bond today for $1005. What is your return rate in one year? (Hint: find out how much did you pay for the bond last year?) Select one: a. 2.04% O b. 3.27% O c. 9.18% d. 10.64% e. 13.27% A bond with a face value of $1,000 matures in 9 years and has a 4% semiannual coupon. The bond currently is traded at $920. Which of the following statements is CORRECT? Select one: O a. The nominal yield to maturity is 4.80% and you would buy each bond for $920 if you think that a fair market interest rate (discount rate) for such bonds is 6.67%. b. The nominal yield to maturity is 5.12% and you would buy each bond for $920 if you think that a fair market interest rate (discount rate) for such bonds is 4.59%. c. The nominal yield to maturity is 5.12% and you would buy each bond for $920 if you think that a fair market interest rate (discount rate) for such bonds is 10.67%. d. The nominal yield to maturity is 8.28% and you would buy each bond for $920 if you think that a fair market interest rate (discount rate) for such bonds is 5.59%. The nominal yield to maturity is 9.59% and you would buy each bond for $920 if you think that a fair market interest rate (discount rate) for such bonds is 8.67%. O e

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