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The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY).
a. Suppose that today you buy an annual coupon bond with a coupon rate of 8.3 percent for $915. The bond has 10 years to maturity. What rate of return do you expect to earn on your investment?

Sagot :

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