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What was the market rate of interest at the time

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Four and a half years ago, you purchased at par, a 10-year 6% coupon bond that pays semi-annual interest. Today the market rate of interest is 4% and you are considering selling the bond. Show your work on paper, not on excel.

-What was the market rate of interest at the time you purchased the bond?

-Suppose you wish to sell the bond today

-How much should you sell the bond for?

-What is the current yield on the bond?

-What will be your effective annual holding period return on the bond?

-Suppose your friend offers you a price of $1125 for the bond today. Would you be willing to sell the bond to her? Explain your answer.

Reference no: EM132515580

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