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Suppose you purchase a 10-year, 4% semi-annual coupon bond for 78.681. If the yield remains constant...

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Finance

Suppose you purchase a 10-year, 4% semi-annual coupon bond for78.681. If the yield remains constant and you reinvest the couponsyou receive at that yield, what will be the value of those couponswhen the bond matures in 10 years?

Answer & Explanation Solved by verified expert
3.6 Ratings (375 Votes)
1 The first step is to find the YTM of the bond YTM is that discount rate at which the price o the bond of 78681 equals the PV of the    See Answer
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Suppose you purchase a 10-year, 4% semi-annual coupon bond for78.681. If the yield remains constant and you reinvest the couponsyou receive at that yield, what will be the value of those couponswhen the bond matures in 10 years?

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