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Suppose that at time 0 you buy a 6%-coupon 30-year bond priced at par, and at time 6% bond 0.5 you sell this bond at

Suppose that at time 0 you buy a 6%-coupon 30-year bond priced at par, and at time 6% bond
0.5 you sell this bond at a price of 90% of par value. Par $1.00
Coupon 6.00%
a) What is your time 0.5 payoff per $1 of initial investment? Maturity 30
$0.93 Time of sale 0.5
Sale price 90%
Sell bond immediately after coupon payment:
payoff = coupon + sale proceeds = coupon + ex-coupon bond price
payoff = 0.06/2 + 0.90 = 0.93
b) What is the rate of return on your investment (annualized, with semi-annual
compounding)?

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