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Assume the market rate of interest is 6 percent for all maturities of AAA debt. You buy a $1000 face value AAA bond, with a 10% coupon rate, with payments paid semi-annually that matures in 15 years. You hold on to the bond for 6 years and then sell it. At the time you sell it, the market rate of interest is 8 percent for all maturities of AAA debt. What rate of return did you earn on your investment in the bond? (Show your work)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91934230

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