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Question 3 1 pts Suppose you purchase a 10-year, 4% semi-annual coupon bond for 78.681. You plan to hold the bond until it matures and
Question 3 1 pts Suppose you purchase a 10-year, 4% semi-annual coupon bond for 78.681. You plan to hold the bond until it matures and reinvest all coupons at the prevailing yield for bonds of this risk level. Immediately after you purchase the bond, the yield for equivalently risk bonds decreases by 100 basis points. What will be your return on this investment in this scenario? Round your answer to thi places. Question 4 1 pts Same scenario as in Question 3 above. Suppose you purchase a 10-year, 4% semi- annual coupon bond for 78.681. Immediately after you purchase the bond, the yield for equivalently risk bonds decreases by 100 basis points. However, instead of holding the bond until maturity, you plan to hold the bond for 2 years and then sell it immediately after receiving the 4th coupon. All coupons will be reinvested at the prevailing yield on equivalently risky bonds. What will be your return on this investment in this scenario? Round your answer to three decimal places
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