What will be the bond rate of return

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Reference no: EM132018283

Given a 5.5 percent annual coupon bond currently has 3 years left until maturity and sells today for $1,056.03. Its yield to maturity is 3.5 percent. Suppose that by the end of the year (Note: at this time, the bond will have only 2 years to maturity), interest rates have fallen and the bond’s yield to maturity is now only 2.0 percent. What will be the bond’s rate of return?

Reference no: EM132018283

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