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$B$

Done

$5$ AND $6)$ Do a Horizon Analysis by computing the four components of bond returns for a $4\%$ coupon $($paying semi$-$annual payments$)$ bond that has $10$ years to maturity, if the current YTM is $8\%$ and the expected VTM in $9$ years is $7\mathrm{.}5\%.$ The reinvestment rate on the coupons will be $3\%$ PER HALF YEAR.

a$)$ Calculate each of the four component effect return values $($Time$,$ Yield, Coupon, Interest earned on Coupon Interest$),$ AND b$)$ Find the average annual overall return.

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