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Suppose an annual coupon bond was issued a several years ago when the interest rate was 9% annually (YTM) The bond's annual coupon rate was
Suppose an annual coupon bond was issued a several years ago when the interest rate was 9% annually (YTM) The bond's annual coupon rate was thus set at 9%.At the year the bond has five years left till maturity, and the current market interest rate is 11% annually?(YTM). A. What is the bond's fair market price at current year with 5 years left till maturity? B. If you decide to buy the bond at the current year and hold it for one year, at what price you are going to sell the bond in the market one year from now? Consider the market annual interest rate (YTM) remain at 11% for the one year period that you hold the bond
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