John bought a 3 year bond with a par value of $1,000 and a coupon rate of
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Question:
John bought a 3 year bond with a par value of $1,000 and a coupon rate of 10% at par. After two years, he was able to sell the bond for $1,050 to Alex. Calculate the rate of return on John's investment, assuming that the coupons could be reinvested with the same interest rate. Calculate Alex's Yield to Maturity.
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