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Q2 In Mar 2008, you spend $980 to buy a bond with the face value of $1000 and the quarterly payments. Suppose the bond matures

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Q2 In Mar 2008, you spend $980 to buy a bond with the face value of $1000 and the quarterly payments. Suppose the bond matures at Dec 2011, its coupon rate is 12%, and the inflation rate is 2%. Questions: Points: (1) What is the YTM? 2 points (2) What is the real interest rate? 2 points (3) What is the duration of this bond? 4 points Q2 In Mar 2008, you spend $980 to buy a bond with the face value of $1000 and the quarterly payments. Suppose the bond matures at Dec 2011, its coupon rate is 12%, and the inflation rate is 2%. Questions: Points: (1) What is the YTM? 2 points (2) What is the real interest rate? 2 points (3) What is the duration of this bond? 4 points

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