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Three years ago, Zoe purchased a ten-year corporate bond with 8% semi-annual coupon payment and the yield-to-maturity was 10% at time of purchase. Today, Zoe
Three years ago, Zoe purchased a ten-year corporate bond with 8% semi-annual coupon payment and the yield-to-maturity was 10% at time of purchase. Today, Zoe just received the coupon payment. In view of the changing market condition, Zoe decided to sell the bond at a market price of $962.74.
(a) At what price should Zoe buy the bond three years ago? (Final answer in 2 decimal places) (b) What is Zoes holding period return after selling the bond today? (Final answer in %
and 2 decimal places)
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