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Problem 1 (3 marks) You bought a bond with face value of $1,000 and 7% coupon rate (paid semi-annually) for $900. After 6 months you

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Problem 1 (3 marks) You bought a bond with face value of $1,000 and 7% coupon rate (paid semi-annually) for $900. After 6 months you received one coupon payment and then sold the bond for the same price. What effective rate of return did you earn on this investment? Problem 2 (3 marks) Is the yield to maturity (YTM) of a bond the same as its expected return? Explain briefly

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