Question: You are considering the ABC Bond position you have, it has a 9 . 0 % coupon rate ( m = 2 ) . You

You are considering the ABC Bond position you have, it has a

9.0 %

coupon rate

(

= 2) .

You bought the bond, at a Quoted price of

74.5 (74.5 %

of PAR

), 5

years ago, when it had

25

years to maturity. Today you are thinking of selling the bond. You know the risk premium on the ABC bond has improved from good financial outcomes and today is

3.45 % .

If the risk free rates remain unchanged, given the information available, what is the realized return on your investment in the ABC Bond?

US Treasury Bonds

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