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You are interested in buy a 6% annual coupon bond with 12 years to maturity and a $1000 par value. Currently bonds like this are
You are interested in buy a 6% annual coupon bond with 12 years to maturity and a $1000 par value. Currently bonds like this are yielding 5.5%. You intend to sell the bond in 3 years. At this point you expect the discount rate to have increased to 7%. What will be your yield over the 3-year period if your assumptions are correct?
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