Question: Consider a 1 5 year 1 0 % coupon bond with a par value of 1 0 0 0 and semi annual coupon payments. The

Consider a 15 year 10% coupon bond with a par value of 1000 and semi annual coupon payments. The bonds current price is 900. The YTM of the bond is 11.4%. USE CALCUALTOR to solve Just show what value you put in.
Assuming an investor bought the bond at 900 and has an income tax rate of 20% and a capital gain tax rate of 15. What is the investors after-tax YTM?
B. Another investor Bob bought the bond for 900 and plan to sell the bond in 5 years. Jim put the bond in his retirement account so he doesnt need to worry about any tax consequence of this investment. He assumes that he can reinvest the coupon sat a rate of 9&. What is his horizon yield during his investment horizon? Assuming the market discount rate at the end of his investment horizon is 10%.
C. Right after Jim bought the bond the market interest rate unexpectedly eent up to 13% and is expected to stay at this level until the bond matures. At this new reinvestment rate, what is his interest on interest income at the end of his investment horizon?

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