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please do a follow threw on what was done. this was all the information given on the study guide. Will bought a 9-year, 6% coupon
please do a follow threw on what was done.
this was all the information given on the study guide.
Will bought a 9-year, 6% coupon bond that pays interest annually (Then the paid coupon interest is soon prior to purchase) The current yield to maturity of bond is 5%. Jill then plans to sell the bond 2 years from now immediately after the annual interest payment is received. Jill then expects the interest rates to decrease to 4% beginning of year- 2. Ignoring taxes but assuming re-investment of interest, what would be Jill's estimated holding period return to be? a) 14.83% b) 3.85% c) 15.05% d) 15.11%Step by Step Solution
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