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Years to maturity Face Value Annual Coupon rate 8% 6% Yield to maturity Bond A Bond BN 15 15 $1,000 $1,000 7.5% 7:5% Question 21
Years to maturity Face Value Annual Coupon rate 8% 6% Yield to maturity Bond A Bond BN 15 15 $1,000 $1,000 7.5% 7:5% Question 21 (4 points) What rate of return would you earn if purchased Bond A now, and then sold it one year later when its yield to maturity was 7.25%? (4 marks) Independent of part (a), assume Bond A is priced at $980 and your required rate of return is 8.2%. Should you purchase the bond? (2 marks)
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