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QUESTION
Cameron paid $980 for a 15-year bond 10 years ago. The bond pays a coupon of 10 percent semiannually. Cameron is planning to sell the bond today.
Cameron paid $980 for a 15-year bond 10 years ago. The bond pays a coupon of 10 percent semiannually. Cameron is planning to sell the bond today. He found that the bond value needs to be adjusted upward with the current inflation rate of 7.56%. If he sells the bond today, what would be his realized yield?
