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Business, 26.11.2019 02:31 jaidencoolman7072

Abond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 8.3%, and sells for $1,170. interest is paid annually.

a.
if the bond has a yield to maturity of 9.7% 1 year from now, what will its price be at that time? (do not round intermediate calculations. round your answer to 2 decimal places.)

price $
b.
what will be the annual rate of return on the bond? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places. negative amount should be indicated by a minus sign.)

rate of return %
c.
now assume that interest is paid semiannually. what will be the annual rate of return on the bond?

slightly greater than your part b answer
slightly less than your part b answer
d.
if the inflation rate during the year is 3%, what is the annual real rate of return on the bond? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places. negative amount should be indicated by a minus sign.)

real rate of return %

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Answers: 2

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