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You pay $1,092 for a 10yr bond today with a semi-annual coupon of 6%. You re- invest all coupon payments at an annual rate of

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You pay $1,092 for a 10yr bond today with a semi-annual coupon of 6%. You re- invest all coupon payments at an annual rate of 5%. After a period of 5 years you have a sudden need for cash and are forced to sell the bond. The 5-yr market rate at that point is equal to 4%. What was the effective annual yield that you have earned over the holding period of 5 years? (note semi annual coupon pmts) 4.65% 6.01% 5.48% 5.78%

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