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You buy a 3-year Treasury note with a $1000 face value, a 1.625% annual coupon, and a yield to maturity of 1.609%. The Treasury note
You buy a 3-year Treasury note with a $1000 face value, a 1.625% annual coupon, and a yield to maturity of 1.609%. The Treasury note pays coupons semi-annually. 1). What is your 3-year holding period return if you hold the bond until maturity? Assume you can reinvest any coupons at the semi-annual EPR and the current yield to maturity of 1.609%. 2). What is your 2-year holding period return if you sell the bond after two years? Assume you can reinvest any coupons at the semi-annual EPR and the current yield to maturity of 1.609%.
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