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Suppose that an investor with a 5 year investment horizon is considering purchasing a 7 year, 9 % coupon bond selling at par. The investor
Suppose that an investor with a year investment horizon is
considering purchasing a year, coupon bond selling at
par. The investor expects that he can reinvest the coupon at
an annual interest rate of and that at the end of the
investment horizon year bond will be selling to offer a yield to
maturity of What is the total return for this
bond?
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