What is the total rate of return on the bond

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Reference no: EM131088030

Consider a bond paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% (BEY or APR). The bond has 3 years until maturity.

a. Find the bond price today and six months from now after the next coupon is paid, assuming the market rate will be constant during the following 6 months.

b. What is the total rate of return on the bond over the six month period?

Reference no: EM131088030

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