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You purchase a 2-year 10% annual coupon bond at a price of $1000, for a YTM of 10%. What will your realized compound yield (effective

You purchase a 2-year 10% annual coupon bond at a price of $1000, for a YTM of 10%. What

will your realized compound yield (effective annualized yield) be if you hold the bond for 2

years, assuming you reinvest the 1st years coupon payment for 1 year (from time 1 to time

2 at a 4% rate of interest? (Carry all your calculations to at least 3-decimal places before

rounding)

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