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Suppose today you buy a 7 % semi - annual coupon bond for $ 1 , 0 3 0 . The bond has 1 5

Suppose today you buy a 7% semi-annual coupon bond for $1,030. The bond has 15 years to maturity. What rate of return do you expect on your investment?
Three years later, with a 1% decline in the yield to maturity (YTM) on your bond, you decide to sell. What price will your bond sell for, and what is the holding period return (HPY) on your investment?
[Hint: If you sell the bond before its maturity, your realized return is the holding period yield(HPY)].

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