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Suppose you purchase a 8 - year bond with 7 % annual coupons. You hold the bond for 4 years, and sell it immediately after
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 for your investment in the bond per $ face value? round
to decimal $
b What cash flows will you receive when you sell your investment in the bond per $ face
value? round to decimal $
c What is the internal rate of return of your investment? answer in percentage points,
rounded to decimal
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