What will be the price of the bond now

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1. You buy a $1,000 face value bond. It currently has a yield to maturity of 6.69 percent. The bond matures in three years and pays interest annually. The coupon rate is 7 percent. What is the current price of this bond? 

2. You now have the bond described in question 1. One year past, and you received a coupon payment. The market interest rate(YTM) changed into 6%. What will be the price of the bond now?

3. Now consider the information in question 1 and 2. If you sell the bond at current price, what will be your holding period return?

A. 6.75%

B. 7%

C. 8.25%

D. 7.95%

Reference no: EM131969418

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