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George Robinson bought 10 year, 13.4 percent coupon bonds issued by the US Treasury three years...

George Robinson bought 10 year, 13.4 percent coupon bonds issued by the US Treasury three years ago at $912.15. If he sells these bonds, for which he paid the face value of $1,000, at the current price of $847.63, what is his realized yeild on the bonds? Assume similar coupon paying bonds make annual coupon payments.
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Answer #1

Let realized yield be r
Hence,
-912.15+847.63/(1+r)^3+13.4%*1000/r*(1-1/(1+r)^3)=0
=>r=12.6065314584263%

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