Suppose you buy a 7.6 percent coupon bond today for $1,070. The bond has 12 years to
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Question:
| Suppose you buy a 7.6 percent coupon bond today for $1,070. The bond has 12 years to maturity. |
| a. | What rate of return do you expect to earn on your investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
| Rate of return | % |
| b. | Two years from now, the YTM on your bond has increased by 2 percent, and you decide to sell. What price will your bond sell for? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
| Price | $ |
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Related Book For 
Fundamentals of Investments Valuation and Management
ISBN: 978-0077283292
5th edition
Authors: Bradford D. Jordan, Thomas W. Miller
Posted Date:
