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Suppose you purchase a 15 -year bond with 6% semiannual coupons. You hold the bond for four years and sell it immediately after receiving the
Suppose you purchase a 15 -year bond with 6% semiannual coupons. You hold the bond for four years and sell it immediately after receiving the eight coupon. If the bond's yield to maturity was 5% when you purchased and sold the bond: a. Is this a premium or a discount bond? Why? b. What cash flows will you pay and receive from your investment in the bond? c. What is your rate of return (your actual return) over the four years of investing in this bond
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