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Page 11 20. Three years ago you purchased a bond for $974.69. The bond had three years to maturity, a coupon rate of 8%, a face value of $1,000, and it pays annually. Each year you reinvested all coupon interest at the prevailing reinvestment rates shown in the table below. Time Prevailing Reinvestment Rate 0 (purchase time) | 6096 7.2% So .072) 2 3 (maturity date) | 8.2% | Y? |(1,-82)t |-69. 35 6.33 Today is the bonds maturity date. What is your realized compound yield on the bond? (a) 8.97%. (b) 7.96%. (c) 8.23%. (d) 9.13%.
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Home nert Page Layout Formulas Data Review View dd-Ins s Cut ta copy. E AutoSum Wrap Text в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 C Conditional Format CeInsert Delete Format Formatting, as Table w styles. ▼ ㆆ ▼ Sort &Find & 2 ClearFe Select Edting Format Painter Clipboard Alignment Number Cells BR BS BT BU BW BX BY BZ CA CD 59 60 61 62 63 64 65 AMOUNT ON MATURITY reinvestment 80 80*(1+0.072) (1+0.094)- 80 80(1+0.094)A1- 80 NOT POSSIBLE TO INVEST year coupon 93.8214 87.52 80 261.34 INVESTED FOR 2 YEARS INVESTED FOR 1 YEAR PV FV YEARS 974.69 1261.34 (1000+ 261.34) 67 68 69 70 71 72 73 74 75 76 RATE 8.97% EXCEL-RATE(3,,-97459, 126134) ANSWER: (a) : 8.97% (4 トト , NOTE BIDDING, UNDERWRITING . . EUAC AW PM LIFE / LP, Ip, MRP, INFLATION YIELD ( WARRANTrefund bond , CLEAN INVOICE PRICE , Sheet1 Sheet3./ Sheet4 23:57 02-01-2019

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