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Business, 05.05.2020 07:09 dashaunpeele

Consider a bond with coupon rate 5.5% maturing 12/31/2008, trading at 100:18 for settlement 06/30/2006. Assume you purchase the bond on 06/30/2006 and you sell it on 12/31/2007. If the semi-annual reinvestment rate of the coupon payment is 3% and the semi-annual yield on 12/31/2007 for this bond is 2%, what is the semi-annual rate of return on your holding of this bond? A. Between 2.5% and 3.5% B. Smaller than 1.5% C. Between 1.5% and 2.5% D. Larger than 3.5%

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Consider a bond with coupon rate 5.5% maturing 12/31/2008, trading at 100:18 for settlement 06/30/20...
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