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You bought a $10,000-face 1%-coupon bond that had four years of remaining maturity one year ago. Rates were 1%. You sold the bond today and
You bought a $10,000-face 1%-coupon bond that had four years of remaining maturity one year ago. Rates were 1%. You sold the bond today and lost 6% on your entire bond investment. What did you buy the bond for? (Round to the nearest Dollar) 2. You bought a $10,000-face 1%-coupon bond that had four years of remaining maturity one year ago. Rates were 1%. You sold the bond today and lost 6% on your entire bond investment. What did you sell the bond for? (Round to the Nearest Dollar) 3. You bought a $10,000-face 1%-coupon bond that had four years of remaining maturity one year ago. Rates were 1%. You sold the bond today and lost 6% on your entire bond investment. Assume you demanded an expected return of 2% to hold this asset. You thought interest rates would be either 0% or 2% today. What probability did you assume for rates being 0%? (Round to nearest whole percent)
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Step: 1
1 To determine what you bought the bond for you need to use the present value formula PV C r 1 1 1 rn FV 1 rn where PV is the present value C is the a...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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