Solved: You expect the ytm of the bond to drop to 5 in two years, Finance Basics

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You expect the ytm of the bond to drop to 5 in two years

Suppose that today you buy a 10-year, 6% annual coupon bond, payable semi-annually, with $1,000 par at 7% YTM. You expect the YTM of the bond to drop to 5% in two years and you plan to sell the bond at 5% YTM. Compute expected (annual) rate of return on this bond.

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Finance Basics: You expect the ytm of the bond to drop to 5 in two years

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Finance Basics: You expect the ytm of the bond to drop to 5 in two years

Reference No:- TGS02691271

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