Suppose that an investor with a 3-year investment horizon is considering buying an 8-year 6% coupon bond

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Suppose that an investor with a 3-year investment horizon is considering buying an 8-year 6% coupon bond selling atpar(semi-annual coupon payments). The investor expects that she can reinvest the coupin payments at an annual interest rate of 7% and that at the end of the investment horizon all bonds will be selling to offer a YTM of 9%.

How much is the coupons & interest earned on reinvesting these coupon by the end of 3-yr?

Round your answer to 2 decimal places.

Posted Date: May 19, 2024 02:14 PM

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Suppose that an investor with a 3-year investment horizon is considering buying an 8-year 6% coupon bond

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