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Treasury model - Dr. K's mother uses her $500,000 to buy Treasury bonds. Assume the bonds have 25 years to maturity, a 4.000% coupon rate,
Treasury model - Dr. K's mother uses her $500,000 to buy Treasury bonds. Assume the bonds have 25 years to maturity, a 4.000% coupon rate, a bid price of 116, and an asked price of 117. For a discussion on Treasury bond prices, see Primer on how to read Treasury bond quotes" on Canvas. Take your time to read this article as it will explain bid price and asked price. What would be her annual interest income? What would be her monthly interest income? (Hint: you can just divide the annual interest income by 12.) What would be her year one annual withdrawal rate (to two decimal places)? UNNUUI Wiinuruwul Pule (W WU uecimal places)! annual interest income = monthly interest income annual withdrawal rate =
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