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Suppose you purchase a 1 0 - year bond with 6 . 4 2 % annual coupons. You hold the bond for 4 years, and
Suppose you purchase a year bond with annual coupons. You hold the bond for years, and sell it
immediately after receiving the fourth coupon. If the bond's yield to maturity was when you purchased and sold
the bond,
a what cash flows will you pay and receive from your investment in the bond per $ face value?
b what is the annual rate of return of your investment?
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