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Three years ago, you bought a 12% bond that had 7 years to maturity and a...

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Finance

Three years ago, you bought a 12% bond that had 7 years tomaturity and a yield to maturity of 12%. Today (after the sixthinterest payment), you sold the bond when it is yielding 13%. Whatis your annual rate of return for the three year period? All couponpayments are semi-annual, and the par value is $1,000.

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3.9 Ratings (331 Votes)
Par Value 1000 Annual Coupon Rate 12 Semiannual Coupon Rate 6 Semiannual Coupon 6 1000 Semiannual Coupon 60 At the time of purchase Time to Maturity 7 years    See Answer
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Three years ago, you bought a 12% bond that had 7 years tomaturity and a yield to maturity of 12%. Today (after the sixthinterest payment), you sold the bond when it is yielding 13%. Whatis your annual rate of return for the three year period? All couponpayments are semi-annual, and the par value is $1,000.

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