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USE EXCEL AND SOLVE THE FOLLOWING (SHOW ME THE TABLE PLEASE) BOTH EX 1 AND 2 are related One bond has a coupon rate of
USE EXCEL AND SOLVE THE FOLLOWING (SHOW ME THE TABLE PLEASE)
BOTH EX 1 AND 2 are related
One bond has a coupon rate of 8%, another a coupon of 12%. Both bonds have 10 -year maturities and sell at a yield to maturity of 10%. If their yields to maturity next year are still 10%, what is the rate of return on each bond? Does the higher coupon bond give a higher rate of return? Exercise 2: If the first bond in exercise 1 has a yield to maturity of 8% one year from now, what will its price be? What will be the rate of return on the bond? If the inflation rate during the year is 3%, what is the real return on the bondStep by Step Solution
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