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Mr. Smith buys a $1000 bond with semi-annual coupons at j2 = 6%. The bond is redeemable at par in 20 years. The price he

Mr. Smith buys a $1000 bond with semi-annual coupons at j2 = 6%. The bond is redeemable at par in 20 years. The price he pays will guarantee him a yield of j4 = 8% if held to maturity. After 5 years, Mr. Smith sells this bond to Miss Lee, who desires a yield of j1 = 5.5% on her investment. What yiled, j4, did Mr. Smith realize? (Method of average)

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