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Three years ago, you purchased a 30-year, $1,000 par value bond for a quoted price of 95.0. The bond pays its 5% coupon semi-annually. a)

Three years ago, you purchased a 30-year, $1,000 par value bond for a quoted price of 95.0. The bond pays its 5% coupon semi-annually.

a) If the present market rate on identical bonds is 4%, at what price should the bond trade today?

b) Is the bond selling at a premium or a discount?

c) If you sell your bond today for the price you calculated above, what is your annual holding period return and your effective annual holding period return over the 3-year period?

d) What is the current yield of the bond?

Please explain/solve with formulas.

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