Consider a bond paying a coupon rate of 875 per year, Financial Management

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Consider a bond paying a coupon rate of 875 per year

Consider a bond paying a coupon rate of 8.75% per year semiannually when the market interest rate is only 3.5% per half-year. The bond has three years until maturity.

a. Find the bond's price today and six months from now after the next coupon is paid.

b. What is the total rate of return on the bond?

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Financial Management: Consider a bond paying a coupon rate of 875 per year

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Financial Management: Consider a bond paying a coupon rate of 875 per year

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