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On 1 0 th February 2 0 2 1 , Jerome purchases a government bond worth $ 4 0 0 , with a maturity of

On 10th February 2021, Jerome purchases a government bond worth $400, with a maturity of 3 years, face value of $500 and a coupon rate of 5% paid annually. The first coupon payment will be received a year from now (i.e. on 10th February 2022). The yield to maturity offered by equally risky bonds is currently 7%. Such a yield to maturity stays constant over the next two years. On 10th February 2022, just after receiving the first coupon payment, Jerome decides to sell this bond. It turns out that, on that day, the new yield to maturity offered by equally risky bonds is 1.5%. At what price will Jerome be able to sell his bond? (No Excel please)

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