Question: please explain the steps 1. Suppose you buy a 30 year, 7.5% annual coupon bond for $980 (when its YTM=7.67%), and you plan to hold
please explain the steps
1. Suppose you buy a 30 year, 7.5% annual coupon bond for $980 (when its YTM=7.67\%), and you plan to hold the bond for 20 years. Your forecast is that the bond's YTM will be 8% when it is sold and that the reinvestment rate on coupons will be 6%. What is the realized compound return.? 2. Consider a 30 year bond paying annual coupon of $80 and selling at par value of $1000. The bond's initial YTM is 8%. What is the HPR if yields at the end of the year increase to 9%
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