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  3. an investor purchases a bond with a 10% annual cou

An investor purchases a bond with a 10% annual coupon rate paid semi-annually with three...

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Finance

An investor purchases a bond with a 10% annual coupon rate paid semi-annually with three years until maturity at face value ($1000).

**Please solve algebraically**

A) What is the bond's annual yield to maturity?

B) Assume annual rates (yield to maturity) for this bond drop to 9% immediately after purchase. What is the annual realized compound yield (RCY) if the investor holds the bond until maturity and reinvests coupon payments at this new rate?

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