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Suppose you purchase a ten-year bond with 9% annual coupons.You hold the bond for four years and sell it immediately after receiving the fourth coupon.
Suppose you purchase a ten-year bond with 9% 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 8.03% 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 internal rate of return of your investment? Note: Assume annual compounding.
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