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You buy a semi-annual bond with a face value of $100 at a price of $98.13. It has a YTM of 5.6% and a fifteen-year
You buy a semi-annual bond with a face value of $100 at a price of $98.13. It has a YTM of 5.6% and a fifteen-year maturity. The second to the last coupon on the bond is worth $3.95 at the end of your holding period. How much of the holding period return comes from coupons, how much comes from the reinvestment of coupons, how much comes from capital gains or losses and how much is due to the return of principal?
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