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Today Alice decides to buy a 6 percent coupon, paid semi-annually, with 8 years until maturity bond. The yield to maturity is 7%. Par value

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Today Alice decides to buy a 6 percent coupon, paid semi-annually, with 8 years until maturity bond. The yield to maturity is 7%. Par value is $1,000. (18 marks] a) What interest payments will Alice receive each time? b) How much is Alice willing to pay for this bond? c) One year later, the yield to maturity increases to 8%. Calculate the holding-period return for Alice. Assume coupon payments are not reinvested

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