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The yield to maturity of a 10-year 4% annual coupon bond is 4%. a.Suppose that you buy the bond today and hold it for 10

The yield to maturity of a 10-year 4% annual coupon bond is 4%.

a.Suppose that you buy the bond today and hold it for 10 years.Assume that the interest rates go up to 5% (100 basis points increase) after the bond is purchased and before the first coupon is received. What is your realized rate of return?

b.Suppose that you buy the bond today and hold it for 6years.Assume that the interest rates go up to 5% (100 basis points increase) after the bond is purchased and before the first coupon is received. What is your realized rate of return?

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