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Suppose you purchase a 10-year bond with 6.3% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth
Suppose you purchase a 10-year bond with 6.3% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.5% when you purchased and sold the bond,
a. what cash flows will you pay and receive from your investment in the bond per $100 face value?
b. what is the rate of return of your investment?
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