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The YTM on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually sell the bond
The YTM on a bond is the interest rate you earn on your investment if interest rates don't
change. If you actually sell the bond before it matures, your realized return is known as
the holding period yield HPY
a Suppose that today you buy a bond with an annual coupon rate of percent for
$ The bond has years to maturity. What rate of return do you expect to earn
on your investment? Assume a par value of $Do not round intermediate
calculations and enter your answer as a percent rounded to decimal places, eg
b Two years from now, the YTM on your bond has declined by percent, and you
decide to sell. What price will your bond sell for? Do not round intermediate
calculations and round your answer to decimal places, eg
b What is the HPY on your investment? Do not round intermediate calculations and
enter your answer as a percent rounded to decimal places, eg
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