A coupon bond has a face value of 1000,sellfor900 at present, 5% coupon rate paid annually, and

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A coupon bond has a face value of 1000,sellfor900 at present, 5% coupon rate paid annually, and mature in 2 years.

(1) Calculate the current yield and yield to maturity. (4 scores)

(2) If an investor with a 1-year holding period and reinvestment rate of 10% over the period, at the end of 1 year this bond with 1 years remaining will sell to yield 8%. Calculate the realized compound yield for the investor.

Related Book For answer-question

OM operations management

ISBN: 978-1285451374

5th edition

Authors: David Alan Collier, James R. Evans

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Posted Date: Jan 11, 2021 07:02 AM

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A coupon bond has a face value of 1000,sellfor900 at present, 5% coupon rate paid annually, and

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OM operations management

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