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An investor bought a bond at par and held it for one year. If the coupon rate is 5%, original maturity of the bond


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An investor bought a bond at par and held it for one year. If the coupon rate is 5%, original maturity of the bond is 8 years, and the yield to maturity of the bond when it was sold was 6%, what is the holding period return of the bond? Assume annual interest coupon payments. Seven years ago, Nash Corporation issued 20-year bonds that had a $1,050 face value, paid interest annually, and had a coupon rate of 9 percent. If the market rate of interest is 4.5 percent today, what is the current market price of an Nash Corporation bond? (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 52.75.) Current market price $ +A

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Solution To calculate the holding period return of the bond we need to calculate the total return of the bond over the oneyear holding period which in... blur-text-image

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