A year ago, Elena bought a Spanish government bond for 1,020 (euros) with a 5% coupon. Over

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A year ago, Elena bought a Spanish government bond for €1,020 (euros) with a 5% coupon. Over the course of the next 12 months, interest rates drop sharply. As a result, she sells the bond at the current price of €1,100.
a. Find the current yield that existed on this bond one year ago and today.
b. Calculate the HPR return in euros for Elena.

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Fundamentals Of Investing

ISBN: 9780135175217

14th Edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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