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Today, you pay $1043.76 to buy a $1000 face value 6% coupon bond (semi-annual coupon payments) bond that matures in 5 years. a.) what is
Today, you pay $1043.76 to buy a $1000 face value 6% coupon bond (semi-annual coupon payments) bond that matures in 5 years.
a.) what is the yield to maturity of this bond?
b.) If you reinvest the coupon payments at 2% per year (1% per 6 monhs), what is the value of the reinvested coupons after 5 years?
c.) what is yout nominal realized compound yield if hold the bond to maturity but reinvest the coupons at a rate of 2% per year (2% per six months)
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