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Suppose the market is efficient and there is no risk. Five years ago, the market interest rate was 10% and Simpson Warehouses Inc. issued twenty-five-year
Suppose the market is efficient and there is no risk. Five years ago, the market interest rate was 10% and Simpson Warehouses Inc. issued twenty-five-year annual par value coupon bonds. Since then, the interest rates in general have risen. The price today for a Simpson bond is $850.61. If you use a buy-and-hold strategy, what is the expected return (%) on Simpson bonds today?
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