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    Bonds: What is the realized yield on your investment?

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    Suppose you buy a 7% coupon bond today for $960. The bond has a face value of $1,000, and has 18 years until maturity, and pays interest semi-annually. You hold the bond for five (5) years and then you decide to sell it. When you sell the bond the YTM has increased by 100 basis points (1%).

    What is the realized yield on your investment?

    Please also show:
    PMT =
    PV =
    FV =
    n =
    i =

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    Solution Summary

    The expert examines the realized yield on an investment of bonds.