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You are an investor purchasing the 8-year maturity, annual coupon rate of 4% bond. The par value is $1,000 and market value upon purchase is

You are an investor purchasing the 8-year maturity, annual coupon rate of 4% bond. The par value is $1,000 and market value upon purchase is $1,000. The Macaulay duration is 7.0 years. One day after purchasing the bond, interest rates increase to a 6% annual rate and remain at this level until bond maturity. Assume bond coupons can be re-invested at a 6% annual rate. Calculate the following immediately after the fourth coupon payment: The accumulated value of re-invested coupons, The market value of the bond, and The total annual return. Show all work.

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