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Question 7: Arshdeep today purchased a bond at a quoted price of 95.1. The bond matures in seven years, pays semi-annual interest, and has an

Question 7:

Arshdeep today purchased a bond at a quoted price of 95.1. The bond matures in seven years, pays semi-annual interest, and has an 8.5% coupon rate. If Arshdeep holds the bond to maturity, what real rate of return will she earn if inflation remains constant at 3.75%?

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