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A bond with exactly five years until maturity paying 3% p.a. coupons semi-annually and with a...

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Finance

A bond with exactly five years until maturity paying 3% p.a.coupons semi-annually and with a face value of $100 was purchasedat a yield of 3.5% p.a. The bond was sold exactly two years laterfor a yield of 2% p.a. All coupons were reinvested at 3% p.a.Calculate the realised yield-to-maturity on this bond.

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