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Problem 6. (10 points) Bill buys a 10-year $1000 par value 6% bond with semi-annual coupons. The price assumes a nominal yield of 6%, compounded
Problem 6. (10 points) Bill buys a 10-year $1000 par value 6% bond with semi-annual coupons. The price assumes a nominal yield of 6%, compounded semi-annually. As Bill receives each coupon payment, he immediately puts the money into an account earning interest at an annual effective rate of i . At the end of 10 years, immediately after Bill receives the final coupon payment and the redemption value of the bond, Bill has earned an annual effective yield of 8% on his investment in the bond. Calculate
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