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Pls do not use excel 6. Suppose that you have purchased a 3-year zero-coupon bond with face value of $1000 and a price of $850.

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6. Suppose that you have purchased a 3-year zero-coupon bond with face value of $1000 and a price of $850. (a) If you hold the bond to maturity, what is your annual rate of return? (1 point) (b) Now suppose you have purchased a 3-year bond with face value of $1000, a 7% annual coupon, and a price of $975. Assuming that you hold the bond to maturity, is th e IRR greater or less than the return on the bond in part (a)? (1 point)

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