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