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What is the return that you earned

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Reference no: EM132829310

Question - You are a fixed-income (bond) portfolio manager. On Jan 15, 2021 you purchased five-year bonds with a face value of $5 million and a coupon rate of 4.0% per year, with coupons paid semi-annually. You purchased the bonds at par.

On January 15, 2022 (immediately after receiving the coupon payment), you sell the bonds for $5.1 million. What is the return that you earned from your investment in the bonds? Express this as an annual rate with semiannual compounding.

Reference no: EM132829310

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