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Please do by hand. No excel. Four and a half years ago, you purchased at par, a 10-year 6% coupon bond that pays semi-annual interest.

Please do by hand. No excel.

Four and a half years ago, you purchased at par, a 10-year 6% coupon bond that pays semi-annual interest. Today the market rate of interest is 4% and you are considering selling the bond. a) What was the market rate of interest at the time you purchased the bond? b) Suppose you wish to sell the bond today i. How much should you sell the bond for? ii. What is the current yield on the bond? iii. If you decide to sell the bond at current market prices, what will be your annual holding period return?

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