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Question 3 ( 2 0 points ) A bond pays a fixed coupon of 6 % p . a . quarterly in arrears and is
Question points A bond pays a fixed coupon of pa quarterly in arrears and is re deemed at An investor who pays income tax and capital gains tax at is considering EUR nominal of the bond. Calculate the price the investor should pay if the bond is redeemed after Y so as to obtain a net yield of i pa effective ii pa effective. The investor purchases the bond for price of i eur ii eur and redeems the bond after years. Estimate, using the linear interpolation, the net yield achieved in both cases.
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