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You have just purchased a $1,000 bond with 7% annual coupon and maturity in 10 years. a. If the yieldtomaturity is 6%, how much did
You have just purchased a $1,000 bond with 7% annual coupon and maturity in 10 years. a. If the yieldtomaturity is 6%, how much did you pay for the bond? b. If, one year later, the bonds yieldtomaturity goes up to 8%, you need cash and must liquidate your investment, what would your 1year holding period return be?
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