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Question 7: Time: 25 minutes Total: 15 marks Arshdeep today purchased a bond at a quoted price of 95.1. The bond matures in seven years,

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Question 7: Time: 25 minutes Total: 15 marks Arshdeep today purchased a bond at a quoted price of 95.1. The bond matures in seven years, pays semiannual interest, and has an 8.5% coupon rate. If Arshdeep holds the bond to maturity, what real rate of return will she earn if ination remains constant at 3.75%

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