What price did you pay for the bond

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Reference no: EM13269497

You bought a bond on the anniversary date that has 12 year to maturity, a 5% coupon rate, the current market required return is 6% and payments are semi-annual.

a) What price did you pay for the bond?

b) Two years have gone by and the market has adjusted to the Federal Reserve continuing quantitative easing and the yield on bonds of the risk are now 4.5%. You sell the bond. Calculate your holding period yield.

Reference no: EM13269497

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