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Calculate the yield to maturity-calculate the return

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Reference no: EM132645500

Consider a two year bond with the following characteristics. The bond was issued at time t = 0 with face value FV = 200, and annual coupon payment of N$ 10 , the current price of the bond is N$ 205.54 . Answer the following questions:

(a) Calculate the yield to maturity.

(b) You are now in period t= 2 , suppose that all market interest rates increased by 2%. Calculate the return (holding period return) at period between t= 0 and t = 2.

Reference no: EM132645500

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