Assume the normal case that coupon payments are


For the following questions, assume the normal case that coupon payments are semi-annual.

a. What is the yield to maturity on a 16-year, 4.6% coupon bond if the bond is currently selling for $1,000.

b. For the bond above, suppose that immediately after purchase market rates change to 2.70%.If you hold the bond for 6 years and then sell it, what is your effective annual return on this investment?

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Financial Management: Assume the normal case that coupon payments are
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