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Then, illustrate the relationship between measures of bond yield for the following bond: $1,000 par value 3-year maturity Coupon rate: 8% Coupon payment: twice annually
Then, illustrate the relationship between measures of bond yield for the following bond: $1,000 par value 3-year maturity Coupon rate: 8% Coupon payment: twice annually Bond currently sells for $1,050.00 . 6. Is the bond a premium bond or a discount bond? 7. What is the coupon amount paid each time a payment is made? 8. What is the current yield? 9. What is the yield to maturity? (use Excel) 10. What is the bond-equivalent yield? Now, assume that you purchased the bond above on the secondary market a day after it was issued, for $1,050. You hold it for exactly 2 years, then you resell it for $1,010. 11. What is your holding period return? 12. What is your rate of return on that investment
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