The market price of the bond and market interest rates

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A bond will make its semi-annual interest payment of $80 exactly five days from today. You purchase this bond today, receive the interest payment five days from now, and sell the bond five days after that. Over then ten days you are holding the bond, the market price of the bond, market interest rates, and all other variables remain the same. You can trade bonds without any costs. Is your profit from this transaction $80? Explain, using the relevant terminology in your explanation.

Reference no: EM131084542

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