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will thumbs up if correct You buy a bond issued by Terlingua Oil & Gas Exploration Corp. The coupon rate is 10%, and coupons are
will thumbs up if correct
You buy a bond issued by Terlingua Oil & Gas Exploration Corp. The coupon rate is 10%, and coupons are paid semi-annually. Par of your bond is $10,000. The bond matures in 10 years. Your price today on the bond is $9,000. In six months, the YTM on the bond has risen by 1%. You collect the coupon payment and sell the bond. What is your effective annual rate of return? Hint: see Example 7 in the Lecture. 1.00% 1.50% O 0.50% 1.72% 2.05%Step by Step Solution
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