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Four years ago, Laura Stills bought six-year, 5.0 percent coupon bonds issued by the Wildhorse Corp. for $950.08. If she...

Four years ago, Laura Stills bought six-year, 5.0 percent coupon bonds issued by the Wildhorse Corp. for $950.08. If she sells these bonds at the current price of $896.38, what will be her realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.) Realised rate of return

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Answer #1

Calculating Realized Return,

Using TVM Calculation,

I = [PV = -950.08, PMT = 50, FV = 896.38, N = 4]

I = 3.93%

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