Suppose that for a price of $940 you purchase a 10-year Treasury bond that has a...

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Suppose that for a price of $940 you purchase a 10-year Treasury bond that has a face value of $1,000 and a coupon rate of 3%

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Answer 1

Answer #1

rate of return for the one-year holding period was

=(coupon income+capital gain)/investment

=(1000*3%+(1150-940))/940

=25.5%

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Answer 2

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