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Martha bought a 20-year bond at inception at face value of $11,000.00. She held it for 7 years, collecting the yearly coupons of 5.16% bond
Martha bought a 20-year bond at inception at face value of $11,000.00. She held it for 7 years, collecting the yearly coupons of 5.16% bond rate selling at maturity, obtaining a yield of 7.8%. Carmen bought the bond from Martha, which she holds until maturity. What is the expected yield for Carmen?
Please show formulas and work please. Thanks
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