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Suppose you purchase a? ten-year bond with 9 % annual coupons.You hold the bond for four...

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Finance

Suppose you purchase a? ten-year bond with 9 % annualcoupons.You hold the bond for four years and sell it immediatelyafter receiving the fourth coupon. If the? bond's yield to maturitywas 8.05 % when you purchased and sold the? bond, a. What cashflows will you pay and receive from your investment in the bond per$ 100 face? value? b. What is the internal rate of return of your?investment? Note?: Assume annual compounding.

Answer & Explanation Solved by verified expert
3.6 Ratings (508 Votes)
a To find the purchase price of the bond we need to put the following values in the financial calculator INPUT 10 805 91009 100 TVM N IY PV PMT FV OUTPUT 10636 So So    See Answer
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