Question: Bond will be held for 10 years and will sell the bond at a 4.7% required yield. During the holding period, the reinvestment rate is

Bond will be held for 10 years and will sell the bond at a 4.7% required yield. During the holding period, the reinvestment rate is expected to be 4.3% until the end of year 7, then rise to 4.6% until the end of year 10.

(a) What is the future value of the coupons and reinvestment interest?

(b) What is the expected sales price of the bond?

PLEASE EXPLAIN, SHOW CALCULATIONS. Not Excel solutions.

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