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Today you purchased a bond at a quoted price of 98.7. The bond matures in five years, pays semi-annual interest, and has a 6.5% coupon

Today you purchased a bond at a quoted price of 98.7. The bond matures in five years, pays semi-annual interest, and has a 6.5% coupon rate. If you hold the bond to maturity, what real rate of return will you earn if inflation remains constant at 2%? (25marks)

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