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please answer with excel B TU 5 === Merge & Cent fx B D (a) Assume that a portfolio manager purchases $175,000,000 of a corporate
please answer with excel
B TU 5 === Merge & Cent fx B D (a) Assume that a portfolio manager purchases $175,000,000 of a corporate bond with a remaining maturity of 29 years with a coupon of 2.25% paid semi-annually. The next coupon payment is exactly 6 months from the settlement date. How much will the portfolio manager have if the bond is held to maturity and coupon payments can be reinvested at 1% per annum, compounded semi-annually? If the purchase price is 99.75, what is the total rate of return? (b) What reinvestment rate is required to produce a total return equal to the required yield to maturity? What is the initial yield to maturity? (c) Assume that the portfolio manager sells the bond in (a) in 4 years at a price providing a yield to maturity of 2.5% per annum, compounded semi-annually. What is the sale price? What is the total rate of return on the investment Step by Step Solution
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