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You buy an 8 percent coupon, 10-year maturity bond when its yield to maturity is 9 percent. One year later, the yield to maturity is
You buy an 8 percent coupon, 10-year maturity bond when its yield to maturity is 9 percent. One year later, the yield to maturity is 10 percent. Assume the face value of the bond is $1,000. (a) What is the price of the bond today? (b) What is the price of the bond one year later? (c) What is your rate of return over the one-year holding period?
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